The American Spectator

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The Outsider Insider

7.10.08 @ 12:01AM

(Page 2 of 4)

TAXMAN, ENEMY OF THE POOR
Re: Peter Ferrara's Economic Growth and the Working Class:

Back in the early '90s, a question was posed to several panelists on a TV show: if an economic policy unquestionably benefited everyone, but disproportionately benefited richer Americans, would you be for or against it? Everyone one of the panelists on the left side of the spectrum voted thumbs down.

For dedicated leftists, there is no such thing as prosperity for all. There is only "fairness."
-- Arnold Ahlert
Boca Raton, Florida

Ah... Taxes! Mr. Ferrara makes a good point near the end when he says, "States without an income tax have higher economic growth, and higher growth in jobs, wages, and incomes." Yet he doesn't make one point that he should. The Republican Party should adopt as part of its party platform to pass some version of the Fair Tax initiative and present a constitutional amendment to abolish the income tax. Mr. Ferrara has just presented the single most effective argument for this. States without an income tax are booming in growth. Even the housing market down here around Austin is doing pretty well, as is the market around Nashville (two places that I know). There might just be a reason for this.

For those of you not familiar with the Fair Tax, it completely removes the taxes on capital and income and replaces these with a single sales tax coupled with a monthly "prebate" to fund the cost of that tax up to the Federal poverty line. Now, just imagine the amount of capital that would come pouring into this country after it was turned into the biggest tax haven in the world.

Do you think anyone would be serious when talking about China catching up to us?

Surveys of domestic and foreign company leaders suggest that not only would domestic companies create more jobs here in the U.S., many foreign companies would relocate their headquarters to these wonderful shores. Now that is change we can believe in. (sorry, couldn't help it)
-- Charles Campbell
Austin, Texas

Peter Ferrara did an outstanding job of exposing the fallacies in socialist thinking. Peter also shows how easily the left can intimidate weak-minded conservatives with just a little tough talk and bad statistics.

I would like to add a few points to his argument. I think it's easily shown that immigration has had little effect on the wages of middle and lower class Americans. A simple plot of average wages from the Bureau of Labor shows that average real wages (adjusted for inflation) declined from 1973 to about 1991, rose until 2000, and then remained flat. Average wages actually rose during the 90's when we witnessed a huge influx of immigrants. What can explain the pattern in average wages? Inflation. Nixon took the US dollar off the gold standard in 1971. Immediately afterwards the prices of all commodities took off like rockets. It took the Federal Reserve until about 1990 to really tame inflation. The decade of the '90s witnessed relatively low inflation and high productivity growth. Since 2000, inflation has returned and productivity flattened.

Inflation hurts the middle and lower classes in two ways. 1) Wages rise more slowly than prices, so average real wages fall during periods of high inflation. 2) Inflation erodes the savings of businesses and investors, leaving less for businesses to invest in new equipment. Productivity growth requires new equipment. Wage increases require productivity growth. So inflation reduces wage increases. Real wages will resume their ascent when the Fed returns to its senses.

Finally, when the Fed pumps vast volumes of money into the economy, as it has done since 2001, a large portion of the new money goes into assets like housing. This drives up the price of housing, makes it less possible for low and middle class Americans to afford, and consequently lowers their standard of living.
-- Roger D. McKinney
Broken Arrow, Oklahoma

LONE STAR COMMUNITY
Re: Jay D. Homnick's Like a Good Neighbor:

And all you people in the other 49 thought '' Don't Mess With Texas" was just a slogan on a garbage bag.
-- Oldguy

Shortly after I moved to Texas last year, the state passed an improved Castle Law. This law allows for anyone to be protected from legal and civil trial when they use aggravated or deadly force against another under a few conditions. In sum, these are if the actor is defending himself or another and is not committing a crime at time of action. The law's details even include the use of such force to stop imminent robbery as long as the actor has right to be there and the actor isn't engaged in criminal activity.

It might be a stretch to say that Mr. Horn had right to be on his neighbor's property, but I'm sure that as he was acting to stop a robbery in progress... the home owner will not object. The real injustice here is that the Texas attorney had the audacity to bring charges against this man in the first place. Which just goes to show that we have a criminal government. Though Mr. Homnick doesn't tell us, I'm willing to bet that the responding officer didn't even attempt to arrest Mr. Horn.

Letter to the Editor

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