Oct 16, 2008

Thank Goodness!

In his latest article on the Southeast Texas Political Review, Philip R. Klein again proves that, like John McCain, he doesn't "really understand the economy very well."  As an example, consider Philip's definition of inflation:

Well......business is going to do one of two things - either pass the costs to you the taxpayers through goods and services (inflation) which will stop buying or at least slow it down or lay off employees to try to cut their costs. Or maybe both.

Philip is clueless: inflation is caused by increases in aggregate demand due to escalating private and government spending, or when the money supply exceeds productivity, leading to a loss of consumer purchasing power. 

As readers can plainly see, Philip self-manufactured definitions aren't even close to reality. His definition of inflation really describes recessionary pressure.  When consumers stop spending, demand lessens and productivity decreases.

Who needs the Oracle of Omaha when we've got the Wingnut Of Nederland?  Joe the Plumber, meet Philip the Idiot. 

Philip is still arguing supply-side economics:

Ask yourself this - have you ever been hired by a poor man or a company that was not making a profit in a long term situation?

When Reagan left office after 8 years of his trickle-down economic theory, the federal deficit had reached an all-time high and real productivity on a unit-worker basis had fallen to its lower level ever, leading to the recession of 1990-1991. 

While most wingnuts who "don't understand the economy very well," point to the early years of the Reagan administration as proof that supply-side economics work, the gains made in the US economy were directly attributable to two reasons:

  • The three year contraction of the money supply by the Federal Reserve under Paul Volcker, which were initiated in the last year of Carter's presidency

  • The long term easing of supply and pricing in oil during the 1980s oil glut

Compare this with Philip's notion of a good economy:

Good economy - higher gas prices. Supply - demand.

The current Bush Administration resurrected this notion of supply-side economics and granted huge tax cuts  to the wealthy through 2010, so here's a question for Philip. Since those tax cuts to corporate American and the rich were the biggest ever granted during a single administration, why is our economy in the toilet today if this trickle-down theory is indeed fact? They call it a theory for a reason, Philip. 

Here's the key to a good economy: tax cuts to America's middle class, which is the economic engine that has always driven the expansion of the US economy. As an example, the economic boom of the 1960s were directly attributable to the middle-class tax cuts enacted by the Kennedy Administration.  

I've looked at the cuts proposed by both Obama and McCain - under Obama, tax cuts to the middle-class are three times those proposed by McCain. And with McCain's proposed taxes on health insurance benefits paid by employers, that tax cut to the middle-class actually turns into a tax increase. 

Here's the dirty little secret that Philip won't admit. He's not a true fiscal conservative. Rather, true fiscal conservatives, like Ron Paul, advocate a pay-as-you-go approach. Consumers can't spend more money than they bring in, not for long anyway. Neither should the government and the best thing for the American consumer is a balanced federal budget, right Philly boy?

I do so love it when Philip talks economics!

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