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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: gpowell who wrote (13834)9/22/2003 8:37:32 PM
From: Elroy JetsonRead Replies (1) of 306849
 
You are perplexed as to how deficit spending destroys national wealth. Like many national socialists you will need many years of education in economics to fully understand this concept, but here are some hints.

A.) If our government eliminated all taxes and used newly created money from the Federal Reserve to fund their operations, our national capital would be devalued and thus it would be partially destroyed. From your myopic point of view you might argue that the very same dollar amount of savings would still exist so no wealth was destroyed - but the wealth would buy less so it was destroyed all the same.

B.) If our government borrows a large amount of money from China to pay for "tax cuts" or other subsidies, (the George W Bush solution) the national wealth has been transferred to China. You may argue the wealth still exists, it's merely owned by someone else - but once again you have missed the point.

C.) If the US cut back on spending we could actually increase national wealth.

1.) Let's say Bush surrendered to Iraq - we could immediately save at least $87 billion and add that to our national wealth.

2.) Let's say Bush cut back on his newly enacted farm subsidies - we could immediately save even more and add it to our national wealth.

An education in economics will help clarify these matters for you further.
But suffice it to say, you cannot both invest national wealth and spend the same wealth elsewhere.
Spending cuts increase national wealth - tax cuts do not.
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