Oh america.....

I'm watching the election returns and while its still to close to call... well that's my problem. To me it seems anyone who's taken any intro economics class or even taken a math class as high as college algebra should be able to see that the fiscal plans of the Democrat party are what is sending us over the so called 'fiscal cliff'.  Tax and spend is the name of the game for so called "forward thinking" and "progressive" economic strategies, and economically they never work. While the idea of "just tax the rich!! they can take it!!" sounds good and the stance of "Give the poor people all the monies!!" feels good, math is against you. The first rule of taxes in economics is that you don't control who pays them. All taxes will in some way be spread out through the entire economy. The resulting lift in prices is just deadweight loss to the economy and slows production. This is based on an almost unquestionable economic principle:

1. People will always act in their own financial self interest.

Now this isn't to say people will break laws all the time to help themselves, but they will do what they can legally to save and or make money. For example, if there are two identical vending machines next to each other, one that has items at a lower price than the other, a customer will almost always buy out of that one unless its empty. This same logic applies to taxes. People will do whatever they can legally to pay the least amount of taxes. Notice this isn't saying they'll attempt to 'dodge' taxes necessarily, though they may. Rather, it is simply the case that people will live,buy, and act in the way that costs the least taxes for them so long as they can. This means taxing the wealthy will only 'trickle down' those costs to all working class consumers, and as a result less goods will be purchased. Add to this the massive inflation of all the Quantitative easing the federal reserve is engaging in and you have a recipe for a double dip recession.


In my opinion the great divide in this country that's holding back our political progress is Social issues. While its quite possible the majority of the "independents" lean fiscally conservative and agree with less taxes and spending, they just can't side with the republicans on social issues. Whether its Gay marriage, abortion, or even drug legality, the swath of moderates side with the democrats. It is for this reason I think the Democrats have been so successful in recent national elections. Between the margin that agrees with tax and spend fiscal policy and the margin that agrees with more liberal social policy, the Democrats are the proverbial "bigger tent" and that is huge in such a divided nation as ours.

My solution, specifically if i ever get into politics, is to move one of the parties towards a truly "moderate" platform and take away many of the "bullets" of the other side. My prefered Situation would be to move the Republican party to accept in policy, but not necessarily in value, the social issues of the left. I say this because to much of the Democrat party is tied up in the idea of spending money as a way to "pay" for votes and getting them to reject that concept is wishful thinking. However, getting the Republicans to accept for example, Abortion, drug legality, and even gay marriage; while probably difficult, would swing national politics in a drastic way. Half of the Democratic weapon is social issues, without that, I doubt they would be able to win a fiscal Debate and this was evidenced in the first Presidential debate that focused on these topics. How I pray for a day when this sort of party arises....