Is Economics a Science?
Over the years, I have appeared on many panels discussing tax reform. Almost always, there were several economists on the panels. There were some notable exceptions but generally the economists failed to agree on the impact of tax reform on economic growth. Instead, they often just discussed the theory of this tweak or that one, but they seemed divorced from how people not working for the government or a think tank would actually act.
Most of these people, along with many of the D.C. Elite, never worked anywhere other than for the government or a think tank. They never had to worry about their employer failing and were insulated from the effects of a bad economy. To them, economic theory was a fun game, and they earned their living by advocating one policy or another.
Some of these economists remind me of the story about the man in the English countryside who sat, watching a shepherd, and a huge flock of sheep pass by his car. Getting out of the car, the man said to the shepherd, "I will bet you $100 against one of your sheep that I can tell you the exact number in this flock." The shepherd thinks it over; it's a big flock so he takes the bet. "973," says the man. The shepherd is astonished, because that is exactly right. Says "OK, I'm a man of my word, take an animal." Man picks one up and begins to walk away.
"Wait," cries the shepherd, "Let me have a chance to get even. Double or nothing that I can guess your exact occupation." Man says sure. "You are an economist for the government or a think tank," says the shepherd. "Amazing!" responds the man, "You are exactly right! But tell me, how did you deduce that?"
"Well," says the shepherd, "put down my dog and I will tell you."
Aren’t We All Economists?
Economy is defined in the Cambridge English Dictionary as, “The system of trade and industry by which the wealth of a country is made and used.” It defines an economist as, “A person who studies or has a special knowledge of economics.”
Using the above definitions, how can anyone exist in life without understanding how to create the “wealth” needed to provide support to their families? All of us have learned that we need to have a job that pays and we need to budget our money carefully. Otherwise, we will not be able to pay our bills and this will lead to bankruptcy—we can’t just print money.
A Rising Tide Lifts All the Boats
President John Kennedy made this comment when he was asked why he was favoring a tax policy that included help for higher wage earners. How much education and training does it take to understand that if there is more demand for products, that more people will be employed to produce and market those products? If more people are employed, then more products can be purchased and the economy grows and the cycle repeats itself again and again.
Gross Domestic Product (GDP)
The Financial Dictionary defines GDP as, “The broadest quantitative measure of a nation's total economic activity. More specifically, GDP represents the monetary value of all goods and services produced within a nation's geographic borders over a specified period of time.”
All of us self-taught economists know that increased GDP growth is good. The more growth, the more jobs and because more jobs require more employees, more people will prosper.
The Rule of 72
For those among us who can tell a dog from a sheep, we don’t have to rely on anyone to calculate the effect of economic growth rates on GDP. If you want to find how long it will take for something to double, you can do a simple calculation. You divide 72 by the rate of return and this yields the number of years it will take for something to double.
If you take the 1% GDP growth released this week, it will take 72 years for the GDP to double. If you increase that to 4% it will take 18 years to double. Obviously a huge difference.
Conclusion
Since no one will argue that the increase in the GDP results in more prosperity, it is obvious that one of the fundamental things to consider when entering into tax reform is its effect on economic growth. However, it is apparently only obvious to those of us who can tell the difference between a dog and a sheep.
Like the drug company executive that worries that his new drug might actually cure the patient and therefore eliminate the need for re-orders, many economists don’t want to “fix” the economy. If the economy is growing at a brisk rate, economists are not needed as much. They will find that they have much less to do and being ignored by the media is perhaps the most feared thing you can do to a “talking head.”
In closing, there is the story that when Albert Einstein died, he met three New Zealanders in the queue outside the Pearly Gates. To pass the time, he asked what were their IQs. The first replied 190. "Wonderful," exclaimed Einstein. "We can discuss the contribution made by Ernest Rutherford to atomic physics and my theory of general relativity". The second answered 150. "Good," said Einstein. "I look forward to discussing the role of New Zealand's nuclear-free legislation in the quest for world peace". The third New Zealander mumbled 50. Einstein paused, and then asked, "So what is your forecast for the budget deficit next year?
1040 Club and Your Donations (Investments)
When you make a donation to Americans For Fair Taxation “(AFFT”), you are making an investment. You could be investing the money in something else. All of us want to see a return on our investment. We want to see the investment used wisely and that the organization provides what it promises.
AFFT has been working for a long time to educate people about the FAIRtax. We are still running into people who have not heard about the FAIRtax, but what a difference it is from even five years ago. The biggest fear of the D.C. Elites is if the American people realize that they have been “had” and demand common sense reform like the FAIRtax. The Elites know that their “friends” in Congress will desert them if threatened with being thrown out of office.
There is going to be some sort of change in the income tax code in 2017. If AFFT is not demanding, on behalf of you, that Congress not just make a few changes but make real reform, then there will be more of the same and America will continue to lose jobs and more of our children will be living with us because they cannot find jobs.
By contributing (investing) $10.40 per month, you help provide a financial base to AFFT. If you can make larger contributions (investments) these will be used not for salaries, as we are all volunteers, but for the needed updates to our economic studies which will be vital in 2017.
Please go to this link to invest in AFFT and in your and your family’s future.
New FAIRtax Book
In last week’s FAIRtax Friday, Ron Maiellaro explained how America’s Big Solution was written and why it is an essential tool to help others understand the FAIRtax. Do you know someone who would like to learn more about the FAIRtax in a format longer than 140 characters at a time? Maybe something like a booklet that presents the basics of the FAIRtax? Well, America’s Big Solution is here! America’s Big Solution is a booklet written by Ocala volunteer Terry Tibbetts and can be purchased as an e-book for the Amazon Kindle, the Barnes & Noble Nook and Apple mobile devices thru the iBook store. And if you prefer a good old fashioned print copy, that’s also available at the above Amazon site.
We all know someone who would prefer a brief introduction to the FAIRtax and are not very active on social media. These potential supporters may be interested in this booklet which is less than 30 pages long.
In order to help the FAIRtax become the law of the land, we need to reach out to everyone possible. This booklet will hopefully reach another important segment of our society. Please do what you can to promote it.
AFFT National LOGO Store
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Replenish your FAIRtax Promotional supplies with 25% off on the following Store items:
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Your FAIRtax Store is ready to meet your promotional demands as we move out of the Conventions and into the final phases of electing a new U.S. President.
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When visiting the Store, don’t forget to order a supply of FAIRtax Palm Cards. Besides handing out palm cards at meetings and events, whenever you send mail through the post office, consider including at least one FAIRtax informational palm card in the envelope - keep spreading the word.
Please take a moment and visit our store by clicking here.
FAIRtax Power Radio
America’s Big Solution: An Introduction to the FAIRtax is now available in print and in electronic form for the Amazon Kindle, Barnes & Noble Nook, Apple iPad in the iBook store as well as on the following services: Scribd, Inktera (formerly Page Foundry) and Kobo
There are many ways in which people can help us educate more Americans about the FAIRtax. In Programs 29 & 30, the FAIRtax Guys describe how listeners can support and promote our efforts. Program 29 concentrates on simple but effective things for people with busy schedules, whereas Program 30 suggests some activities that might take a little more time. The programs are free to the listeners. Please share these links with your friends and relatives.
FAIRtax Power Radio is now available on iTunes and Spreaker. A new episode will be posted every Friday morning but you can listen at any time by going to one of these sites. There is no cost to listen.
In Episode 3, Thomas Jefferson paid us a visit and gave his opinion of our federal income tax. As you might guess, he wasn’t very happy with what he saw. Then we searched for “the perfect tax system”.
In future episodes, we will hear from Bob “Paxworthy” famous for his “You Might Be A FAIRtax Fan!” routine. We are always open to your thoughts and opinions. You can contact me at this email address or at theFAIRtaxguys@gmail.com.
The episodes are still available on SoundCloud and YouTube but Spreaker is the site that lets up branch out to other, more popular sites that cater to podcasting.
Bob and Ron will continue with FAIRtax Power Radio until HR 25 becomes the law of the land in 2017. After that, I’m sure our episodes will go into the Radio Hall of Fame! Please share this information with your constituents and anyone else you care to. The more people we educate about the FAIRtax, the better the chances are that it will become a reality next year.
To listen to FTPR on SoundCloud (free and audio only) go to these links:
FTPR Program 29 on SoundCloud
FTPR Program 30 on SoundCloud
FTPR Program 29 on YouTube
FTPR Program 30 on YouTube
To listen to FTPR on SoundCloud (free and audio only) go to these links:
FTPR Program 29 on SoundCloud
FTPR Program 30 on SoundCloud
FTPR Program 29 on YouTube
FTPR Program 30 on YouTube
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