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Eating The Rich


A few weeks ago, Iowahawk decided to do a little math in order to determine if, as prominent liberals like Michael Moore have claimed, there is really more than enough "wealth and cash" locked up by the evil rich, to easily pay for as many big government boondoggles as the Left can dream up.  Bill Whittle turned Iowahawk's post into an informative video that every progressive in America needs to see:



Actually I think there may be a few holes in these calculations.  For example, if you confiscate all the annual salaries of professional athletes, you will have already significantly reduced the amount of money in the "all annual earnings above $250,000" category.  Also, if you confiscate all the assets of the Forbes 500, who is going to buy all of those Hollywood mansions, and what will they pay for them with?  And how much would the Forbes 500 finally be worth after the equities markets crashed, following the confiscation (or even threatened confiscation) of all corporate earnings?  So in actuality, the situation is probably a lot more dire than Iowahawk and Bill Whittle make it out to be.

So what would happen if we actually decided to carry out such a crazy scheme?  Let's start with paying down the national debt.  If we assume that the long-standing progressive axiom "the rich have stolen our wealth" is true, and we further assume that radical activist Stephen Lerner is accurate when he claims that Wall Street banks "stole $17 trillion", we could confiscate all this money to pay off our current national debt, and have about 9 months of Federal government operating cash left over.

After that nine months was up, we could initiate the Iowahawk plan, taking all the earnings from ExxonMoble and Walmart, confiscating all of the salaries of professional athletes, seizing all the personal wealth of the Forbes 500, ending military involvement in Afghanistan and Iraq, and so forth.  That would get us through 12 more months.

Then we could begin confiscating the aggregate national wealth of the United States -- the total amount of wealth (cash, securities, real estate, antiques, etc.) owned by all American citizens and residents, starting with the richest first.  But using President Obama's projected spending rates, and eventually having to confiscate the total wealth owned by everyone, we would burn through our current aggregate national wealth of $54.2 trillion (minus the $3 trilion or so already taken by the Iowahawk plan) in only 11 more years.

Then what would we do?

Of course if we ever instituted such a plan, those time spans would inevitably be much shorter.  Think about it: when you confiscate corporate profits you wreck the equities markets, because no one wants to be a shareholder in a company that can't pay dividends and has a steadily declining market value.  And when you destroy that much wealth, values of tangible items (and correspondingly, their market prices) significantly decline, because there are fewer dollars available to spend.  That will cause the value of assets like real estate to plummet, thus lowering the aggregate wealth of the nation even further.  And when the government prints more money to make up the void, the resulting inflation will render cash assets worthless. 

Hyperinflation has been the result in every situation where a once-thriving economy has been pushed so deeply into debt that they have no alternative other than firing up the currency printing presses.  The economy of Wiemar Germany was wrecked because the country was forced to go deeply in debt in order to meet the requirements for World War I reparations payments.  In Zimbabwe the Communist government seized the land and assets of white farmers, and squandered them through mismanagement and corruption, leaving the nation broke and deeply in debt, with no means of generating wealth.  And in Argentina, the government embarked on a 60 year campaign of class warfare and redistributionist economics which left the country so deeply in debt that by 1989 inflation was out of control, and a decade later the government was forced to default on its bond obligations.

History tells us that going deeper and deeper into debt and printing more money will not solve our current fiscal problems.  And a few back-of-the-envelope calculations show, beyond any reasonable doubt, that there is no way for the government to tax and confiscate our nation into prosperity.

Without a healthy economy that generate an enormous amount of money each year, the kind of government that liberals dream about can never be a reality.  Paradoxically though, every time progressives push the government into spending (and therefore consuming) significantly more money, or try to get the government more involved in the mechanism of the economy, the economy slows down, which leaves us with even more debt.

That's reality.  And we need to start dealing with it, because we're not likely to alter it any time soon.
___________________________

ADDED: I forgot to include a link to this post from a week ago Friday, by Megan McArdle, which runs yet another set of numbers (proposed tax rate increases on incomes over $100,000, and resulting effective tax rates after tax shelters etc. are factored in) and unsurprisingly concludes that "taxing the rich" won't even come close to solving our current budget deficit problem.
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Comments (17)

"History tells us that g... (Below threshold)
Woop:

"History tells us that going deeper and deeper into debt and printing more money will not solve our current fiscal problems."

Actually, that's false. History here in the US doesn't support that theory - at all.

As long as you keep an eye on inflation and the relative value of the dollar versus other currencies, printing more money can work towards reducing our fiscal pains.

I'm not saying it's a good idea, just saying that Michael's statement that "history tell us..." is bullshit.

Woop, While you es... (Below threshold)
Kool aid Klan:

Woop,

While you espouse bullshit on a daily basis here does not make you an expert on the subject.

Have another drink.

I don't know Michael. I'd ... (Below threshold)
GarandFan:

I don't know Michael. I'd kinda like to see Al Gore or Michael Moore's face when Barry came and told them to get out of their homes while emptying their bank accounts.

I'm sure somewhere in the background, they'd be screaming "But...but...but...we're liberals....WE'RE EXEMPT!"

"As long as you keep an eye... (Below threshold)
GarandFan:

"As long as you keep an eye on inflation and the relative value of the dollar versus other currencies, printing more money can work towards reducing our fiscal pains."

Hey Dumbfuck! FYI, since February the Chinese have been DIVESTING themselves of US bonds. Just a little at a time so as not to kill the market. The Japanese were buying some of those up. BEFORE THE EARTHQUAKE HIT.

And FYI, the Saudi's aren't stupid. You print worthless money - you make it worth LESS. Guess what - THEY RAISE THE PRICE OF OIL.

Here let me beat the trolls... (Below threshold)
retired military:

Here let me beat the trolls.

Why dont we just return back to the same tax rate we had under the clinton era?

Better yet.

lets double the amount of income taxes EVERYONE in the US paid last year. If you paid 10k last year you owe 20k this year.

If you paid 1 million last year you owe 2 million this year.

Then take all that extra money we are getting in and pay off the deficit this year.

Oh wait. One small tiny little thing.

That plan would only bring in $1.4 trillion and the deficit this year is $1.6 trillion.

Seems we dont have a tax problem. WE HAVE A SPENDING PROBLEM.

Yes, we definitely have a s... (Below threshold)
kevino:

Yes, we definitely have a spending problem, and we can't tax our way out of this.

However, a part of me does want to put some huge taxes in place for the very rich. I would put an exemption in place for professional athletes because they need to make their money for a few short years and then live with their injuries for the rest of their lives. But if we had a 75% income tax on people in other entertain businesses life TV and movies like fat stupid slobs like Michael Moore, I might support that. I'm sick and tired of Hollywood D-list celebrities telling everyone how to run their lives, so, yeah, let's tax them out of the country so that it's much cheaper for them to live and work in London or Paris. I'm sick of hearing them complaining and threatening to leave the country.

Ken,We need to gro... (Below threshold)
hcddbz:

Ken,

We need to grow the pie. so from know on everyone in Hollywood will get the same salary from the janitor to the movie start. They will all get the same treatment. Same thing with NFL. You know we got to free slaves. I mean why should a quarterback get more money than they guy who sells hot dogs.

Mr Moore 8i call on you to set the example pay the teachers of Madison with all of your wealth.

All pigs are equal some pigs are just more equal than others.
Micky.

Woop,1st History w... (Below threshold)
hcddbz:

Woop,

1st History would have start during th1970's.
That is when the US currency went of the Gold standard.
2. Since the US is currently the worlds receive currency when it values goes down that cause the prices of goods and services to raise.

Look we had had recessions and expressions all through our history on and off the gold standard. At the end of the day our money is valued by people faith and trust in the US Goverment.

Guess what we are poising the world trust and that what is going to drive inflation up.

Let's not eat the rich. Let... (Below threshold)
Jay Guevara:

Let's not eat the rich. Let's eat the obese instead.

Dibs on Michael Moore.

Woop ~ You're extremely stu... (Below threshold)
Jim Addison:

Woop ~ You're extremely stupid, but so are most Obama supporters.

As long as you keep an eye on inflation and the relative value of the dollar versus other currencies, printing more money can work towards reducing our fiscal pains.

Printing money in excess of increased economic growth IS inflation, and Obama and Bernanke have been at it furiously. Calling it "quantitative easing" is just a way of deceiving the dull of wit, like you.

You are the sort of person who can raise the average intelligence of a room all by himself - by leaving it.

Cut Woop some slack. On hi... (Below threshold)
Caesar Augustus:

Cut Woop some slack. On his campus they might not even teach the principles of monetary-based inflation.

Regarding Bernanke and QE2, things even are worse than they appear. The program is almost done and all they've accomplished is massive commodities hoarding, especially in food and fuel (which ironically hits the poor the hardest), a speculative rally in stocks on Wall St. (the next crash will be of epic proportions) and the window dressing of decent headline GDP growth figures, but with a stagnant labor force and flat wages.

By this time next year things will be very ugly on Main Street. Figure on seeing 10% reported unemployment (the actual numbers will be much worse).

"... there is no way for th... (Below threshold)
A_Nonny_Mouse:

"... there is no way for the government to tax and confiscate our nation into prosperity... "
========================================

Well, no way for us-the-taxed to become prosperous.

But for the elite taxers, & their cronies, and their most-favoritest lap-dog corporations, life after confiscation could be pretty sweet for a relatively long time....

#1If it smells lik... (Below threshold)
914:

#1

If it smells like poop, it must be wooop.

On his campus they might... (Below threshold)
Evil Otto:

On his campus they might not even teach the principles of monetary-based inflation.

Hamburger University?

I don't know Michael. I'... (Below threshold)
Evil Otto:

I don't know Michael. I'd kinda like to see Al Gore or Michael Moore's face when Barry came and told them to get out of their homes while emptying their bank accounts.

Ah, but they will be exempt. They will always be exempt. Rand called it "The Aristocracy of Pull." It's not what you do, it's who you know that determines how much tax you pay and what the government takes from you.

In short, it's Chicago politics on the national stage. Chicago-trained Obama and his cronies deal in favoritism and perks for those who cough up campaign cash, those who say the right things and provide useful propaganda for them.

Support Atlas Shrugged. Twe... (Below threshold)
Jeff Blogworthy:

Support Atlas Shrugged. Tweak the Moochers.

http://www.atlasshruggedpart1.com/?gclid=CK3IsMSjpKgCFdI42godCylyHw

I stole this from here (htt... (Below threshold)
dsc:

I stole this from here (http://news.yahoo.com/s/ap/20110417/ap_on_bi_ge/us_no_taxes;_ylt=AgukOi2TooWB1pFbWeXhOsGs0NUE;_ylu=X3oDMTNiNGVmcDhzBGFzc2V0A2FwLzIwMTEwNDE3L3VzX25vX3RheGVzBGNjb2RlA21vc3Rwb3B1bGFyBGNwb3MDMQRwb3MDMgRwdANob21lX2Nva2UEc2VjA3luX3RvcF9zdG9yeQRzbGsDc3VwZXJyaWNoc2Vl) and I completely agree with it:

Politicians are the only people in the world who create problems and
then campaign against them.

Have you ever wondered, if both the Democrats and the Republicans are
against deficits, WHY do we have deficits?

Have you ever wondered, if all the politicians are against inflation
and high taxes, WHY do we have inflation and high taxes?

You and I don't propose a federal budget. The President does.

You and I don't have the Constitutional authority to vote on
appropriations. The House of Representatives does.

You and I don't write the tax code, Congress does.

You and I don't set fiscal policy, Congress does.

You and I don't control monetary policy, the Federal Reserve Bank does.

One hundred senators, 435 congressmen, one President, and nine Supreme
Court justices equates to 545 human beings out of the 300 million are
directly, legally, morally, and individually responsible for the
domestic problems that plague this country.

I excluded the members of the Federal Reserve Board because that
problem was created by the Congress. In 1913, Congress delegated its
Constitutional duty to provide a sound currency to a federally
chartered, but private, central bank.

I excluded all the special interests and lobbyists for a sound reason.
They have no legal authority. They have no ability to coerce a senator,
a congressman, or a President to do one cotton-picking thing. I don't
care if they offer a politician $1 million dollars in cash. The
politician has the power to accept or reject it. No matter what the
lobbyist promises, it is the legislator's responsibility to determine
how he votes.

Those 545 human beings spend much of their energy convincing you that
what they did is not their fault. They cooperate in this common con
regardless of party.

What separates a politician from a normal human being is an excessive
amount of gall. No normal human being would have the gall of a Speaker,
who stood up and criticized the President for creating deficits. The
President can only propose a budget. He cannot force the Congress to
accept it.

The Constitution, which is the supreme law of the land, gives sole
responsibility to the House of Representatives for originating and
approving appropriations and taxes. Who is the speaker of the House?
John Boehner. He is the leader of the majority party. He and fellow
House members, not the President, can approve any budget they want. If
the President vetoes it, they can pass it over his veto if they agree
to.

It seems inconceivable to me that a nation of 300 million cannot
replace 545 people who stand convicted -- by present facts -- of
incompetence and irresponsibility. I can't think of a single domestic
problem that is not traceable directly to those 545 people. When you
fully grasp the plain truth that 545 people exercise the power of the
federal government, then it must follow that what exists is what they
want to exist.

If the tax code is unfair, it's because they want it unfair.

If the budget is in the red, it's because they want it in the red.

If the Army & Marines are in Iraq and Afghanistan it's because they
want them in Iraq and Afghanistan ....

If they do not receive social security but are on an elite retirement
plan not available to the people, it's because they want it that way.

There are no insoluble government problems.

Do not let these 545 people shift the blame to bureaucrats, whom they
hire and whose jobs they can abolish; to lobbyists, whose gifts and
advice they can reject; to regulators, to whom they give the power to
regulate and from whom they can take this power. Above all, do not let
them con you into the belief that there exists disembodied mystical
forces like "the economy," "inflation," or "politics" that prevent them
from doing what they take an oath to do.




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