Lessons Learned about US Economy
- More than half of our wealth depends on the social fabric, trained workers, clear property rights, and stable government.
- Cheating the tax man only works if everyone doesn’t do it. Because a cheat only benefits if the society continues to provide the safeguards that allowed the cheat to make and keep wealth.
- Paying taxes are the price of success, not the onus of wealth.
- Adam Smith named the unseen force that guides individuals to unwittingly benefit society through the pursuit of their private interests.
- But the Fallacy of Composition often short-circuits the Invisible Hand. If it’s good for one, it’s not always good for all.
Capitalism and the Free Market
- They work well together.
- They require unfettered access to information and ease of entry for competitors.
- Unfortunately, successful companies want to keep unfavorable information hidden and want regulations that inhibit competition.
- Make a mistake by not considering Net Worth.
- Fifty billion dollars on road building lower the cost of transportation for decades, not just the years the money is spent.
- Homeowners know that a mortgage will put them in a budget deficit but is a valuable tool to increase their net worth.
- Should not have a separate political voice from their owners, as this doubles their leader’s voices.
- In addition, corporations have foreign interests that often do not align with US interests.
- Used two primary avenues to boost the economy, reduce corporate taxes and reduce individual taxes.
- Of the $100 billion reduction to corporate tax bills (in the first of 10 years), less than 10% flowed out of the financial system and into the GDP. Ninety-one percent was spent of dividends and buybacks.
- Of the $200 billion reduction that taxpayers received in the first year (of a total $500 billion over 10 years), about two-thirds flowed directly into GDP.
- Conclusion: Bottom-Up tax cuts increase GDP more significantly than trickle-down tax cuts.
- Everyone needs to be healthy for the economy to flourish. National health insurance is wise.
- We underpay many workers who perform essential services.
- Businesses don’t like the immutable laws of the marketplace when they indicate many of them should go out of business.
Economic Value of Civilization Not just resources
Invisible Hand Operation, consequence, and requirements
The Invisible Hand’s Scar Abuses that can occur
Good For One Fallacy of composition in action
Missing Side of Budget Debates All businesses must file net worth statements. Why not government?
Corporations The Constitution doesn’t mention corporations.
Lane between Wall Street and Main Street Visual showing money flows between financial world and GDP.
2017 Tax Cut Impact Clear comparison of bottom-up and trickle-down effects on GDP.
Lockdown Economic Takeaway Let’s not forget who had to work to keep our society operating.