Entries Tagged 'Government' ↓

Break the Budget Impasse – A Tax Cut that Raises Revenue

House Republicans have said they just want a “little something” from the Democrats in order to sign a clean debt limit bill. They want some kind of spending cuts to help them save face. Well, how about a tax cut – a tax cut that will also be a stimulus helping to restore jobs and raise revenue?

Most of us agree that consumer demand is a major sticking point to growing our economy. Corporations have more than enough money to expand production of goods and services, but there aren’t enough people out there able to buy their products.

In particular, those Americans with the least amount of money now have even less money to spend. Years of steadily declining wages and now, as a result of the financial crisis, loss of interest income, and for some, their homes and jobs, have led the descent into belt-tightening just to pay the bills. This contributes to a sluggish economy on the one hand, and a lessening of tax revenue on the other.

The Republicans’ answer seems to be trim the national budget by taking more away from those on entitlements. The Democrats point out that this will reduce the amount of spending American citizens do.

What if we could increase the spending by workers who collect entitlements? Continue reading →

Grand Theft Government – Biggest Game in Town!

Rent-seeking is a technical term few people understand. Put simply, rent-seeking is the effort to gain a privilege from government intended to increase the seekers’ incomes.

You’ll note I used the plurals for the words “seeker” and “income”. That’s because rent-seeking these days is being driven by lobbyists paid to promote the incomes of whole industry sectors or even areas of the world.

It’s no longer individuals or individual corporations seeking privileges from government: it’s groups of big corporations working together through their industry trade associations to use governments for their own self-interest, regardless of the impact or costs to others.

Rent-seeking by whole industries

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What The Heck Is Rent-Seeking?

Rent seeking is the petitioning of governments for special privileges or monopolies that are made possible by governments’ power to coerce citizens to do things, e.g., pay money or obey laws. The purpose of rent-seeking is to gain a higher income.

Why isn’t rent-seeking called “profit” seeking?

Some say rent-seeking should be called profit-seeking. It is income-seeking via government privileges, but rents and profits are different kinds of income. Successful rent-seekers  gain “economic rents“.

If this is too technical, you could focus on the “privileges” government gives rent seekers. Special privileges containing words like “rights” or “incentives” or “subsidies” that governments grant political income-seekers are usually of a finite duration – one can only lease or rent them.

An example of rent-seeking

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