It really is fairly simple which explains why the libtard at HuffPo doesn’t get it. No one says that the government won’t spend the money collected in tax revenues. The point is, who is a better investor, the private sector or the government? I contend that government almost always spends money on things that the private sector finds unworthy of investing in.
If that premise is accurate, then by definition, taking $1 dollar out of the private sector through taxation to be spent by the government will, on a net basis, reduce economic activity.
Take the $800B stimulus package. It is claimed that the stimulus “created” between 1-3 million jobs. That means that every job created cost between $267k-$800k. Hardly a bargain!
So, the point is not whether the gov’t will spend the money; rather, who will create more economic activity with it? I say, let the private, free market do what it does best — allocate scarce capital to productive investments rather than let the gov’t flush it!
With a private funding, the first dollar goes to the development of the product or service and to those who's efforts are required to make it happen. The last person in line for compensation is the person who owns the business or service that is being produced.If the product or service is deemed valuable by the market, the business will continue. As it becomes more successful similar businesses will rush to the market with better, cheaper, faster products and services.
In the bizarro world of public (Federal) spending, the first tax dollar spent by the Federal government is spent on the guaranteed pension plans and benefits of the Federal employees. The second dollar spent by the Federal government is to Federal employees as the bureaucratic filter captures the “cost” of redistributing tax revenue. Subsequent dollars are used with decreasing efficiency as the Federal mindset reinforces failure, not success. If a Federal program is deemed as unsuccessful the cause in almost inevitably that there was too little money spent on it. Witness the War on Poverty. After umpteen trillion dollars spent to eradicate poverty what do we have? More poor people, of course. As for the collision of the public and private sectors, the litany of Solyndra’s over history is too long to mention.
The politics are much more complicated. It seems as if the least dangerous course for Republicans is to pass a one-year extension of the Bush tax cuts in the House, send it to the Senate and adjourn for the year. Let Harry Reid be the one to send us over "the fiscal cliff".