Politicians Hold Voters Hostage with Spending Cuts

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Despite what you may have heard about the negatives of sequestration, the expiration of the payroll tax actually covers the entire $85.3 billion in mandatory cuts. In fact, all the tax increases for fiscal year 2013 are said to raise almost double the revenue as the sequestration reductions. So why is Obama running around acting like it is the end of the world, and letting illegal immigrants out of prison to save money? Why not just use some of his new tax revenue to cover the costs? After all, since taxes were raised two times as high as the amount of mandatory cuts, wouldn’t you say Obama got the better end of the “compromise”?

It will never be enough for Obama and his allies. There will never be enough tax increases and there will never be an acceptable budget cut. We see politicians do this at every level of government, they threaten that necessary things will be cut if taxes aren’t raised, ignoring the waste, and holding voters hostage. If you oppose a local tax hike, politicians will fire teachers, cut the police budget, and sell some fire trucks and then say, “see, we need the extra revenue!”. Never discussed are the upcoming plans to spend a million renovating a playground, or a million on new ipads for the school, or the six figure “curriculum coordinator” who keeps his job while teachers get fired, despite class sizes reaching 30 students.

At the federal level because of sequestration $42.7 billion will be cut from defense, almost $10 billion from Medicare and another $33 billion elsewhere, according to this article. Surely our defense and Medicare budgets can handle those cuts if placed correctly, but why not take the cuts from somewhere like welfare? In fiscal year 2011 over a trillion dollars was spent on welfare, $746 billion of which came from the federal government. It would be so easy to find the proper savings there, and still provide those who need it with help. But politicians do not want cuts that America can stomach, they want you to notice the cuts, and come crying back demanding a tax increase.

Of course the point is that yes, the government needs money in order to do the things  a government should be doing. The government does not need an endless supply of money to do everything they can think of, and that is the point we are getting to. The yearly budget is already about a quarter of the Gross Domestic Product, and our economy can’t handle much more. And despite the fact that our debt is now equal to the GDP, somehow people think that raising taxes is the solution.

Excessive government spending and a skyrocketing national debt are slowing growth and job creation over the long term. Federal spending is crowding out private investment and job creation, and the U.S. debt is quickly growing to economically damaging levels.

This is because when money is spent by our government, it must be taken out of the private sector; you can’t spend the same dollar twice. The government does not create wealth (farming land, creating products, harvesting resources etc.), therefore any money the government spends is reducing the wealth of the private sector. The economy can only grow with private sector funds (because all government funds come from the private sector), so the government can only move money around. But when the government moves money around, it changes the incentives for producing, and the things our economy “demands” become less profitable because of the government’s cut, and displacement of resources. Tax increases therefore harm economic growth by removing money which would have been used for growing a business and hiring workers, and by reducing incentives to produce and invest.

This is not a revenue problem, this is a spending problem.

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