“The Laffer Curve” declares that there is a point of balance at which both taxes and economic growth are maximized – Republicans are too stupid to grasp that simple concept.

The joke, which you are not finding so funny, is that the cutting of taxes combined with debt generating makes individuals and nations poorer.  So, naturally, that is exactly what the Neo-cons – as lead by Reagan, Bush and Bush, with hopes of finishing us off with McCain – have done.  Neo-cons are typically fiscal spendthrifts and as socially irresponsible as any group could possibly be.

The key to taxation is government expenditures.  Lowering taxes and wasting that which is still collected leads to the problems we are currently beginning to see.

Beginning to see!  Should we select the wrong individual as our next president, or should the current one be allowed to notch-up his policies, the path will be set in such a manner as to – for all practical purposes, as far as the current generation is concerned – prevent recovery and lead to total fiscal and national disaster.  

Consider this: Finland is on of the highest taxed nations in the world, and enjoys one of the highest standards of living in the world.  WHY?

Could it be that their “cradle-to-grave” social programs are the reason?

Neo-cons, the Rush Limbaugh “ditto head” types, will scream at the reality embodied in the fact that “cradle-to-grave” protection – and the  taxation required to pay for it – will actually produce the tide that will raise all the boats (to use their analogy); but the reality is, such taxation does raise all.

Think about it.  By definition, if you are a “Ditto head” you don’t think, you nod as if you got it, and say yes, ditto, of course to the most idiotic and counter-experience pronouncements.

Think about it.  You get a necessary service for free.  What becomes of the money you have in your pocket?  Do you pay for that service again, or use the money to raise your standard of living by paying for that which you also need, but is not free, or by obtaining things you would just like to have?

Think about it.  You are not taxed, but you need to put money aside for retirement – do you?  Americans save at a negative rate; which is to say we borrow more than we save.
– As a nation, we owe more for our homes than the equity we have.  – As a nation, we owe more on credit cards than we have as disposable income.
– As a nation, we cannot afford to maintain our infrastructure and more than we can afford to improve our homes – both require excessive borrowing.  At least they would, if we were to prioritize our actions sufficiently to take care of our basic needs.  We don’t!  We put our money into “throwaway” products.  We “throwaway” petroleum  in the form of plastic wrap and plastic bags to carry a single item that has a handle and could more easily be carried without the bag.  We are a “throwaway”society – thus a wasteful society; and exactly the society the neo-cons want us to be.

“Throwaway” is the descriptor for most, if not the vast majority of, military expenditures.  Iraq – half a TRILLION dollars a year (on budget and off budget as special appropriations.

On the subject of hidden “throwaway” money, consider this: The deficit is projected at between 3 and 4 hundred billion, the national debt is about nine trillion; but the Congress, to cover all expenditures needed to raise the debt ceiling to ten point two (10.2) trillion dollars.  They needed to add a trillion to the debt ceiling to cover a third of a trillion deficit – whose money are they about to “throwaway”?

Let’s get back to how Finland can have a high standard of living with – because of – high taxes.  It’s actually very simple.  We rely on private sector investment and then cover everything with emergency responses.

Hence, you buy medical insurance, or not; if you gamble on being healthy, when you have a medical emergency, you go to the emergency room, plead poverty and the government pays.  When soldiers are wounded (as we see in Iraq), like the citizen who chose not to have medical insurance, it is not budgeted for; so...   

So the soldier and their family needs to jump through hoops for several years, eventually getting the coverage, but having gotten worse for the lack of proper, total, timely care, costs taxpayers more – the extra billions in the debt limit.

If we had universal health care, citizens and soldiers would be covered, get timely treatment, and return to society as productive members (Tax payers) rather than spend years being non-productive as they await the inevitable decision that they should have been covered from the start – a delay which also cost, in officials arguing against coverage, more than the coverage itself would have cost.

In America we pay twice as much per person as the Universal heal nations, we die younger, the probability of infants dying is higher, and we spend more on (also have better) catastrophic healthcare than the Universal health nations – because we need to; we require everyone to be catastrophically sick before we will provide coverage.   Of course, the private Insurance companies deny coverage at all levels, or require bankrupting co-pays.

Catastrophic co-pay is interesting – even chance the patient dies, or even if they live, they or their estate cannot pay the thousands in co-pay and so the real costs are in the coverage, with the co-pay as an added benefit which is not expected to be collected.  GEE that raises the cost of medical care for everyone.

Now, through government covering via taxation and actual saving by the government in a trust, eliminate the retirement savings, the medical games, and other basic survival worries – let the people do what people do, worry about their standard of living, and everyone’s standard of living rises, those who have a temporary setback recover faster (they don;’t need to worry about survival and can focus on their  economic, or physical, recovery).

Society profits – the basic elements of the Laffer Curve work because taxation can be seen centralized collection and distribution of private sector expenditures which should be, but often are not, provided for privately.  It is what the banks used to call “forced savings” – today, it is what happens when money is automatically moved to a savings account that cannot be tapped except for explicit purposes (the government created education fund, IRA’s 401k’s which effectively are taxes – they come out of gross earnings and reduce the net available for discretionary spending – but taxes which only the very rich can afford.).

The idea is, properly utilized, taxes allow everyone to afford it and benefit.

As we are going, we are raising taxes – to the point of bankrupting our society.  Oh you don’t see the tax increase.  Unless you live long enough you might never see it.  You will see the effect that will reveal it – the lower dollar, our falling to the second largest economy in the world (already achieved), the removal of people like Bill Gates for inclusion among the world class wealthy (his money is in dollars, and as dollar falls, so does his rank in the world – so expect Microsoft to go offshore, outside the impact of a falling dollar, soon).

As the wealthy realize their wealth is vanishing against their purchasing power, they will – they must – move their holdings to other nations, and so will further depress this one.   The Rothchild Banking interests grew because they functioned across boarders and were thus  immune to the stupidity of any one nation – diversification is a core discipline in finance.

When the debts come due – when the nation is no longer a place to invest – the creditors will demand payment.  TAXES MUST go up, and go up sharply against the incomes of all who still have funds, or assets, here.  The government will collapse – as history has demonstrated so many governments before us have collapsed.  And it will all be because of the actions of the Neo-cons – as promoted by Rush Limbaugh, and lead by Reagan, Bush and Bush; with the possibility of McCain or Clinton putting in the final nail of the coffin.
 
You can read a nice article on the Curve, and six hundred years of its recognition, at “Laffer curve From Wikipedia.”  (http://en.wikipedia.org/wiki/Laffer_curve )