Bad Math Leads to Bad Economics

The combination of demographic change and poorly designed entitlement programs is producing an ever-increasing burden of federal spending.

In my Twelfth Theorem of Government, I pointed out that this inevitably will mean big tax increases on lower-income and middle-class households.

As stated in the Theorem, if there was a way of financing big government by only taxing the rich, other nations already would have made that choice.

Some of them have tried, but there simply are not enough rich people to finance large welfare states.

But I don’t want any tax increases. Class-warfare tax increases are a bad idea, and so are tax increases on regular people.

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It would be much better for the country to reform entitlement programs.

But many politicians (both Democrats and Republicans) disagree.

However, that means they want big tax increases on lower-income and middle-class household.

To emphasize this point, I unveiled my Fifteenth Theorem of Government, which drives home the point that you can’t have big government without pillaging ordinary people.

I pontificated on this issue today in a MoneyShow presentation.

“Point I: Spending Burden Is Rapidly Increasing

Point 2: Because Spending Burden Is Increasing Faster than Economy, this Means Ever-Rising Debt

Point 3: Current Projections Are Grim, but Will Probably Get Worse Since Politicians Can’t Resist Adding to the Spending Burden

Point 4: Class-Warfare Taxes on the Rich Will Not Solve the Problem

Point 5: Absent Entitlement Reform, Politicians Sooner or Later Will Push Massive Tax Increases on Lower-Income and Middle-Class Households

Point 6: Copying European Fiscal Policy Is Not a Good Idea”

There were lots of charts to justify my two theorems, but these six points hopefully are a good summary of my argument.

For what it’s worth, the first five points are basic math.

Indeed, there are some honest folks on the left (including Paul Krugman) who have made similar observations.

My final point is where the honest leftists and I have a big disagreement. They think it would be a good thing to copy Europe. But I think that would be crazy since European living standards are much lower because of bloated welfare states.

Courtesy of International Liberty.

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