March, 2010

Economics 101

I see three kinds of people in the U.S. — Producers, Supporters, and Consumers.

Producers provide a product for others to use. Examples would be food, tools, cars, etc. Without production there is no economy.

Supporters provide a service to Producers so they can produce. Examples would be health care, education, transportation infrastructure, etc.

Consumers do not produce anything, and they do not support those that do, they only consume what others provide.

Today, about half of Americans are mostly Consumers. If they bother to exercise their right to vote, they vote almost exclusively for Democrats. They prefer the nanny state where consumption is not dependent on contribution. Democrats excel at exploiting that hope for ever expanding entitlements.

However, Consumers can have a profound impact on the lives of Producers and Supporters.

In 2010, the average cost per family to subsidize our Federal, State, and local governments will be over $55,000. More than $17,000 of that amount will be borrowed. So if a family does not pay $55,000 in taxes, others have to pay for them. Some of those others will be future generations.

Since our government spends more than they collect, they have to borrow money to fund all the expenditures. The interest on our 2010 debt is about $450 million a day or 9% of total federal tax revenue. Our interest payment is almost a third of what we spend on national defense or social security.

Increasing taxes to support more consumption is insanity, we must reduce spending!

The Republicans got us into this mess; however, the Democrats have raised unfunded spending to an art form.

The 2010 elections are coming. Electing career politicians hasn’t worked for us, so let’s try voting for some regular folks. The alternative is a country where even the “nanny stater’s” will not be pleased.

Rex A. Hoover