by WebHubbleTelescope » Wed 21 Jun 2006, 00:03:49
$this->bbcode_second_pass_quote('Jack', ' ')As for it being a sort of flat tax, why belabor that point? It would merely stir up those who oppose a flat tax.
I will keep on belaboring the point. For those that don't understand this economic ju-jitsu, it works like this: the fed needs to print money to replace the currency that gets lost, worn out, and to loan to investors (treasury notes, etc). The usual route is to go through the fed reserve banks. Now consider what happens when the new money gets routed directly to government agencies. In that case, the banks really play no part of it and the money goes directly in the hands of government workers and projects, having never gone through the tax-paying cycle. In the end, the money acts like a tide that lifts (or lowers) all boats. Most people are none the wiser, as the effect is diffused over a large number of people.
What people don't appreciate, however, is that this serves as a highly regressive tax, or a flat tax, which in the end provides an inflationary pressure that affects everyone proportionally, but affects the lower strata more because lower income people tend to use more of their income. Steve Forbes, and other Republicans love the flat-tax idea because there are enough regressive taxes, such as social security, to tip the balance their way.
What is most amazing about this idea, is that it doesn't go anywhere near tin-foil hat territory. There is nothing physically impossible about doing this and it doesn't take a huge conspiracy, just a little bit of behind-the-scenes government bureaucracy. And to top it off, the government can keep on giving extra tax breaks to the rich, insured in the knowledge that they can continue to make government payrolls. They don't even have to go through the charade of offering up treasury notes to "borrow" against.
So what's this about "stir(ring) up those who oppose a flat tax" ? I really don't understand your concern. What's wrong with tossing out this information? The more we understand Ponzi schemes, 3-card monte, etc. the more enlightened we become.
As someone said recently:
"The problem with Reagan was that he wanted to roll back the New Deal. The problem with Bush is that he wants to roll back the Age of Enlightenment".