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THE DEATH OF PROSPERITY (in America)
http://www.investmentrarities.com/bestofjimcook.html ^

Posted on 07/22/2005 1:40:11 AM PDT by Capitalism2003

Best of Jim Cook July 19, 2005

THE DEATH OF PROSPERITY

The purpose of our Constitution and Bill of Rights was to limit government. The founding fathers knew that we must be protected from our own government. People seem to forget that. Throughout the twentieth century, liberals did all they could to broaden the role of the state and put government in charge of all aspects of our lives. They bear responsibility for constructing a massive centralized bureaucracy. Now both parties endorse big government. What our founding fathers tried to prevent from happening, the politicians have managed to override.

The freedom philosopher, Leonard Read, explained why America became great. "The Constitution and the Bill of Rights more severely limited government than government had ever before been limited." Two benefits occurred. "…individuals did not turn to government for security, welfare, or prosperity because government was so limited that it had little on hand to dispense…" and this limited power did not "permit taking from some citizens and giving to others."

So, "The American people gained a world-wide reputation for being self-reliant." And since the government did not much interfere, tax away income or force people to do what they otherwise wouldn’t do, "There was a freeing, a releasing of creative energy on a scale unheard of before."

An economic system evolved in which trade was based on the voluntary exchange of goods and services. People were free to buy, sell, trade and produce on mutually agreed upon terms. This highly individualistic system of economic freedom was capitalism. It was responsible for making America an economic powerhouse.

However, big government has changed that. For example, business invests enormous energy in complying with laws and regulations. Regulators are a police force intent on tripping up errant businesses, levying fines or worse. A single regulation can exterminate an entire industry. Too much of management’s attention given to regulators detracts from a company’s efficiency and profits. Every time the government lays down a new law or a regulation, it has the potential for serious damage.

Taxes are a penalty on progress. They eat up almost half of a worker’s earnings. Individuals and corporations could invest the money that goes to taxes far more efficiently than the government, who transfers it to ne’er-do-wells, special interests, bailouts of federally guaranteed losers and runaway debt service. As the economist, Ludwig von Mises pointed out, "What the government spends is entirely taken from the pockets of the individual citizens and corporations. The spending and investing capacity of the public is curtailed to the same extent to which the spending ability of the government expands."

Business pays for all or part of health care costs, unemployment benefits, workman’s compensation insurance, product liability insurance, Social Security benefits and Medicare. When you add this to non-productive legal costs, licensing fees, property taxes, sales tax, income tax and excise taxes, you have a thoroughbred carrying a 300-pound jockey. In other parts of the world they don’t have to carry this much weight.

Government programs such as welfare benefits, unemployment benefits and other subsidy programs weaken the work force. Certain workers will sluff off, report late, miss work or abuse chemicals if they know a government check will replace their paycheck should they be fired. The government provides incentives to goof off.

Our low national savings rate is, to some extent, caused by the easy availability of subsidies. People would save more if it weren’t for the wide spectrum of programs from cheap loans, to unemployment, to Social Security. Low savings means we spend more and invest less. The Government’s social safety net helps kill savings.

The government has fostered a national ethic of getting something for nothing. This burdens business with phony lawsuits, employee theft, trumped up medical claims, insurance fraud and an explosion of bad character. For example, generous workman compensation benefits, legislated by state governments, have caused an astronomical increase in disability claims for back injuries.

Legal barriers to starting a business such, as permits, bonds, licenses or regulations, help big companies fend off competition. Government subsidies to certain businesses favor their success against competitors. Government intervention stifles startups and competition that benefits consumers.

U.S. business spends too much time and money defending itself against litigation. Suits emanating from the government can paralyze a company for years. Government condones product liability lawsuits that make innovation less likely, and wipes out whole segments of commerce. America desperately needs Tort Reform, but liberal lawyers and segments of the government fiercely resist any such initiative.

The government’s monetary policy wreaks havoc on enterprise. Inflation, artificially low interest rates, currency fluctuations, the boom and bust cycle, and dollar devaluations all make doing business more difficult. Furthermore, inflation tends to make investment in production less rewarding than financial assets.

The sentiments of most government employees, and the multitude who enforce the rules, are fiercely anti-business. They have little or no knowledge of how the market system works. They see business as greed driven, and profits as an evil that government should control. They constantly push for higher taxes.

Most politicians and government employees don’t understand wealth creation. They fail to see that profits come from meeting the needs of others by providing products and services that improve living standards. They don’t realize that consumers are the rulers of the free market because their buying choices determine the success or failure of the companies competing to serve them. They are unaware that to serve one’s self-interest, the successful capitalist must first serve the self-interest of others. This is the moral underpinning of free enterprise. But rather than notice the unassailable high moral ground of free-market capitalism, they prefer to see greed and inequality.

Too much government is bad for business, bad for the economy and bad for the citizenry. It’s the reason countries fail. In other parts of the world they are lowering taxes and cutting back on government. As a result, they are prospering as never before. Russia, China and India are all going to pass us unless we find a way to reduce the big drag our government puts on our economy.

What a shame.


TOPICS:
KEYWORDS: pharisee; prosperity; taxes; taxreform
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1 posted on 07/22/2005 1:40:11 AM PDT by Capitalism2003
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To: Capitalism2003

I don't need the article to tell me, i feel it each month as the government bends me over and picks my wallet before and after taxes. I'm on the payment program as that's the only way i can afford to pay them on my money they taxed me and penalized me ontop of that so they can get more $$.
Thanks for sharing the article though.


2 posted on 07/22/2005 2:11:22 AM PDT by 1FASTGLOCK45 (FreeRepublic: More fun than watching Dem'Rats drown like Turkeys in the rain! ! !)
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To: Capitalism2003

Thanks for posting this. It is a very well written article and hits the nail right on the head.

This article should be posted everywhere it can be read and passed along on the internet.

Only problem is that we have gone too far over the line to ever correct the problem. It has fed upon itself to the point that it cannot be turned around by the weaklings and career politicans who are afraid of losing even a single vote.


3 posted on 07/22/2005 2:11:52 AM PDT by DH
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To: 1FASTGLOCK45

The sad part about it is that that a great number of the "elecorate" just don't get it. And those of us that do can do precious little about it.


4 posted on 07/22/2005 2:35:25 AM PDT by ImpBill (Nothing More!)
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To: Capitalism2003

When I clicked on the link, I thought (from the title) this was going to be yet another mindless anti-Bush screed. Instead, it turned out to be a good article.

My husband and I were just talking about California. A beautiful state, my home state even though I live elsewhere, it is degenerating under the oppression of an overwhelmingly DemocRAT/socialist government. Many entitlements are written into the constitution. While the state declines, the same "from each according to his means" bunch wants to incorporate even MORE socialism, as if the cause of the problem can solve the problem.

First, we get rid of the Democrats. Next, the RINOs. My dream 2-party system is one where two conservative parties compete against each other, and all the power-hungry leftists are separated into little squabbling impotent parties.


5 posted on 07/22/2005 3:50:55 AM PDT by exDemMom (Now that I've finally accepted that I'm living a bad hair life, I'm more at peace with the world.)
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To: Capitalism2003
Too much government is bad for business...

True, but America is too big for big government to stop it at this point. Our economy is so huge at this point, I don't know how anyone can say we are not a materially prosperous economy.

6 posted on 07/22/2005 4:40:36 AM PDT by LifeOrGoods? (God is not a God of fear, but of power, love and a sane mind.)
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To: exDemMom

hm...maybe I should change the title so more Freepeers will actually read it. Too bad we don't have an edit feature..


7 posted on 07/22/2005 4:57:16 AM PDT by Capitalism2003
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To: Capitalism2003

Ayn Rand said all of this in 1954. Of course I'd bet she never dreamed that things would go as far as they have in America. It won't be long before "Atlas Shrug's."


8 posted on 07/22/2005 6:08:45 AM PDT by CSM ( If the government has taken your money, it has fulfilled its Social Security promises. (dufekin))
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To: ancient_geezer

For your ping list.


9 posted on 07/22/2005 6:09:08 AM PDT by CSM ( If the government has taken your money, it has fulfilled its Social Security promises. (dufekin))
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To: CSM

for any of you interested in "shrugging", read some of the commentary/articles on sovereignlife.com (NOT an ad...just advice)


10 posted on 07/22/2005 6:21:23 AM PDT by Capitalism2003
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To: Capitalism2003

"Too much government is bad for business, bad for the economy and bad for the citizenry."

Amen to that. Sure wish it weren't so late in the game, though. Good article. Thanks for posting that. It's a keeper.


11 posted on 07/22/2005 6:27:19 AM PDT by Diana in Wisconsin (Save The Earth. It's The Only Planet With Chocolate.)
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To: CSM

I'm looking for a way to "shrug" right now. I'm tired of being a gun owning individualist and being treated like societies whipping boy.


12 posted on 07/22/2005 6:54:15 AM PDT by Dead Corpse (Never underestimate the will of the downtrodden to lie flatter.)
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To: Capitalism2003; Dead Corpse

Cap, Thanks. I will definitely be checking into that one.

Dead, Me too!


13 posted on 07/22/2005 7:34:02 AM PDT by CSM ( If the government has taken your money, it has fulfilled its Social Security promises. (dufekin))
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To: CSM; Taxman; pigdog; Principled; EternalVigilance; rwrcpa1; phil_will1; kevkrom; n-tres-ted; Zon; ..

Too much government is bad for business, bad for the economy and bad for the citizenry. It’s the reason countries fail. In other parts of the world they are lowering taxes and cutting back on government. As a result, they are prospering as never before. Russia, China and India are all going to pass us unless we find a way to reduce the big drag our government puts on our economy.

 

Bottomline of why we must reform of how we tax, and get government under control.

 

A Taxreform bump for you all.

If you would like to be added to this ping list let me know.

John Linder in the House(HR25) & Saxby Chambliss Senate(S25) offer a comprehensive bill to kill all income and SS/Medicare payroll taxes outright and replace them with with a national retail sales tax administered by the states.

H.R.25,S.25
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.

Refer for additional information:


14 posted on 07/22/2005 11:24:23 AM PDT by ancient_geezer (Don't reform it, Replace it!!)
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To: DH
Now both parties endorse big government.

As I understand it, a decision was made by the Bush administration early on, maybe even before they were elected, that attacking big government at this point was not only futile but self-defeating because of the political flack it would cause. They decided instead to try to start the turn around by first making what we have work better.

An example is the education bill which is widely considered a cave in and that Bush allowed Ted Kennedy to write in hopes of ending partisanship. That became the conventional wisdom until the NEA discovered the Devil in the details. The bill required accountability from the schools or suffer the loss of federal dollars. There was a gradual implementation giving the schools three years to comply. Well, now is the time to pay the piper and they are squealing like pigs under a gate. In the meantime a number of schools have improved considerably.

There have been other examples that don't come immediately to mind but this administration has put reform into many bills not haled as such.

15 posted on 07/22/2005 11:52:51 AM PDT by Mind-numbed Robot (Not all that needs to be done needs to be done by the government.)
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To: Capitalism2003

Great lead-in and a fine expression by Jim Cook. Too bad more of the "anti" posters on this thread don't understand this and take the comments to heart.


16 posted on 07/22/2005 12:33:09 PM PDT by pigdog
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To: Capitalism2003
Uhhhh, the majority of the ruling elite, regardless of party are CAPITALISTS.

This includes, Kennedy's, Kerrys, Bushes, Rockefeller's and on and on. The author had one eye open when he wrote the article.

When a person can spend millions of his own money seeking a seat in this government, it is not capitalism he is looking for, it is power. FDR, a capitalist, found that the way to power was through the US Treasury.

It is incorrect to hang the demise of this country only on the takers, hang it also on the CAPITALISTS that run the country.

17 posted on 07/22/2005 12:46:25 PM PDT by cynicom
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To: cynicom

Makes you sound sort of like a "taker" when perhaps instead you should become a "voter".

Take a peek at the FairTax act:

http://thomas.loc.gov/cgi-bin/query/z?c109:H.R.25:


18 posted on 07/22/2005 1:31:41 PM PDT by pigdog
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To: pigdog

I just like to spread the blame around. I agree with the author 100 per cent, however, the takers are not getting anything that the government does not offer in exchange for votes.


19 posted on 07/22/2005 1:37:25 PM PDT by cynicom
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To: cynicom

I think that's why B. Franklin said something like "... you have a representative republic - if you can keep it ...". He obviously was aware of the dangers of vote-buying with tax money by Congress.

That's why becoming a voter is a good idea - and why the FairTax is also since it limits the sort of hanky-panky that presently goes on with a tax system that can easily hide tax increases on others and grant tax benefits only to selected parties. The FairTax has only a single rate that all pay and no exceptions. Raising taxes to help a few becomes a drag on everyone's wallet.


20 posted on 07/22/2005 1:43:56 PM PDT by pigdog
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