Ask a D.C. insider what’s the best way to solve the debt crisis. Nine times out of ten, they’ll recommend taking on more debt. That’s how things operate in the Potomac swamp. Up is down, right is left, digging yourself into more debt is the best way to get out of it. But it wasn’t always like this. In fact, there used to be common sense when it came to the economy. So where did it all go wrong?
Politicians talk about the uninsured. Special interests argue on behalf of those with pre-existing conditions. But why is no one wondering how doctors are affected by the new law? They’re the ones on the frontlines dealing directly with new patients, as well as the red tape that makes bureaucracies go round.
Politicians proclaim the benefits of small business while on the campaign trail. But when they meet in the seedy halls of Congress, they have no problem doing whatever they can to stifle, regulate, and subdue their progress. Instead of siding with entrepreneurs, these politicians often side with political allies and cronies that helped put them into office.
Just because you’re retired doesn’t mean you have to stop working. Especially now that you have all the time in the world to do what you really want. Entrepreneurs don’t only come out of Silicon Valley. They come from all walks of life, from all different ages. If you’re retired and want to stay active while you relax, then find out the steps you need to take in order to start, manage, and grow your next small business.
Austrian economics does more than tell you what happens when the government disturbs market forces. In the hands of knowledgeable investors and entrepreneurs, it can tell you exactly what to expect from the market. Market behavior depends on how people behave. And how people behave is central to the Austrian perspective.
The U.S. dollar has been the world's reserve currency for almost a century, and already there are signs it may be in decline. But that doesn't mean it's not still valuable. On the contrary... As Chris Mayer explains, there are many reasons the U.S. dollar will remain relevant on the world stage for years to come. Read on...
World War II might have dragged the country out of the Great Depression, but it did so at a great price. Central planning took center stage, and politicans and bureaucrats suddenly knew what was best for America, the economy, and your life. On top of that, they replaced the free market with a new economic system… Creditism.
If you’re good at something should you be penalized so others have a chance at success? Should award winning actors and actresses be barred from future Oscar ceremonies to give other men and women the chance to succeed? Success should always be rewarded and encouraged. But what happens when you have a government that wants to even the playing field and take away the spoils of success. Gregory Bresiger finds out...
Practical people often pooh-pooh fiction reading as a time wasting dalliance, dominated by a Marxist coloring of the world. However, fiction readers were given a scientific reason recently for spending hours absorbing fanciful figments of someone’s imagination.
Argentina is suffering the ravages of government debasement of the currency -- i.e., inflation, the process by which government pays for its ever-increasing debts and bills by simply printing more paper currency. The expanded money supply results in a lower value of everyone’s money, which is reflected in the rising prices of the things that money buys.
When government expansion is allowed to continue unabated or when it casts a heavy regulatory shadow on America’s entrepreneurial spirit, the freedoms that we’ve come to know, and perhaps take for granted, slowly begin to slip away.
Its acceptance is as widespread as its justification is important, for it provides the rationale for the Federal Reserve’s unprecedented monetary expansion since 2008. While critics may dispute the wealth effect’s magnitude, few have challenged its conceptual soundness. Such is the purpose of this article. The wealth effect is but a mantra without merit.
Baron Rothschild, the famous French financier, was once heard to say that he knew of only two men who really understood money -- an obscure clerk in the Bank of France and one of the directors of the Bank of England. “Unfortunately,” he added, “they disagree.”
The new reality of Obamacare’s tax credits has left finance reporters to pen articles warning readers to “take care” when considering a tax credit and providing strategies for how best to “protect yourself.” So what do finance reporters know that the White House doesn’t?
Nihilo ex nihilo fit. Out of nothing, nothing comes. First put forward by ancient Greek philosopher Parmenides in the fifth century B.C., Thomas Aquinas and St. Augustine later used this axiom to prove that the universe needed a “first mover” to get things going. Even if the whole thing began with some kind of “Big Bang” moment, it still needed a banger to bang it. Who? God, of course.
Economic theories don’t lend themselves to laboratory testing, so the work of a national appraisal firm is especially enlightening. A new study lends support to the Austrian business cycle theory, which says that the less government is involved, the faster a market will recover.
What positive steps can we take? The energy that is now expended by well intentioned, freedom-seeking individuals on the destructive course of politics can be turned into powerful steps that will have a positive effect on the future. All are moral, right and just. None require aggressing. Consider the following...
The Affordable Care Act creates a new health insurance marketplace (the exchange). But because of the great uncertainty about what buyers will enter the market and who will buy what product, the law creates three vehicles to reduce insurance company risk.
Politicians and bureaucrats are notorious for manufacturing euphemisms -- clever but deceptive substitutes for what they really mean but don’t want to admit. That’s how the phrase “revenue enhancement” entered the vocabulary. Some of our courageous friends in government couldn’t bring themselves to say “tax hike.”
It’s easy to be negative about the U.S. economy these days. Find a glint of silver, and folks come running to point out all of the dark clouds looming about. This, of course, is what we got last week when the monthly jobs report was released from the U.S. Department of Labor (DOL). Folks pooh-poohed the number of jobs and whining that they’re not enough or that it’s less than a bunch of economists thought that it might be. But you know what? Stuff ’em.
Facts are easy. You can check facts. What supporters of the Affordable Care Act are doing, on the other hand, transcends factual bungling. It’s far more advanced: a warping of reality so debauched it looks like something out of a tale by H.P. Lovecraft.
The east coast and parts of the southern U.S. were to varying degrees paralyzed by blizzards a few weeks ago. The snow as expected rendered the roads treacherous, and in anticipation of slick streets, shoppers flocked to the grocery stores in advance.The rush into grocery stores, and its aftermath, offers worthwhile lessons in economics.First up, […]
The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self-sufficient.But our systems of state charity — aka welfare — have too frequently had the opposite effect: They have actually created dependency. It is time to rethink the way we help people.I’m going to […]
Last year was quite the year for Bitcoin. We’ve seen exponential growth in Bitcoin’s exchange rate and extensive coverage in the media. Another phenomenon we have witnessed is the proliferation of alternative cryptocurrencies, five of which we’ve provided below.What all of these cryptocurrencies have in common is that they rely on a decentralized network to […]
President Obama crowed in his State of the Union speech about the economy, even mentioning “a rebounding housing market.” Maybe he was referring to friends in high places, like the seller of Penthouse One in New York, which just closed for $50.9 million, all cash. Millions of mere-mortal homeowners likely wanted to throw something at […]
The nonpartisan Congressional Budget Office is acting in a bipartisan way to cover up the biggest single threat to the bipartisan political alliance that is stripping America of its wealth: the United States Congress.There is no question that the following policy is bipartisan. Democrats and Republicans in Congress are completely agreed that the following information […]
Recent difficulties with implementing the Affordable Care Act have increased opposition to the program. A majority of Americans now oppose it. Problems with the HealthCare.gov website are in all likelihood temporary. However, there are serious long-term problems, particularly considering long-term finance and labor supply issues. Given the mounting difficulties with and growing concerns about the […]
Beginning last year, mainstream reporters began kvetching about a rather brilliant tax strategy used by Google, Apple and hundreds of other technology firms. It’s been the path to survival for these companies. It relies on a feature of digital goods that would have otherwise been impossible with physical goods. Firms are setting up revenue-receiving subsidiaries in lower-tax states and countries as a means of lowering their overall tax liability.
The most-colorful tactic is called the Double Irish With a Dutch Sandwich. It involves setting up holding companies to receive profits in Ireland, where corporate taxation is 12.5%, and in the Netherlands, too, rather than the in the U.S., with its outrageous rates that can be above 35%, including state taxation. Another step is to create virtual corporate offices in states with no corporate taxation.
These tactics are saving Apple, for example, some $2.4 billion annually from being confiscated, according to a report in The New York Times. Wal-Mart and other physically bound companies can’t do this. “Technology giants have taken advantage of tax codes written for an industrial age and ill-suited to today’s digital economy.”
That is true enough, and this is true in many more ways, as well. Thank goodness the tax code is ill-suited for the digital economy; if it were suited, the digital economy would be far less advanced than it is!
It is precisely because so many features of digital economic life escape the anachronistic regulatory machine that the technology sector is booming while most everything else is breaking under the weight of government control.
Consider that the latest data on U.S. economic growth are pathetic — anemic!. And this is the stuff the government dishes out, which probably paints a prettier picture than the grim reality.
Yet how can anyone be surprised given the explosive growth of government power and debt over the last 10 years? It’s crowded out private growth and left hardly any room for enterprise to breathe at all. If you doubt it, ask anyone who is actually trying to make a buck these days.
After all this bludgeoning, the real question is why hasn’t the American economy been actively shrinking 5% per year? Why are there any signs of life at all?
It has something to do with the emergence of digital technology. That’s been our one source of salvation. It’s as if government sank the economic Titanic and then lifeboats made from digits suddenly appeared in the water to save us all. Without the growth of technology, we would all be sleeping with the fishes by now.
Digits are light and quick and can scoot around to avoid the killer sights of the government tax police. The production of their most-valuable assets can take place anywhere on tiny units. They are is scalable, copyable and infinitely reproducible, to permit the marginal unit production costs of items sold to fall to zero, or close to it.
Put this all together and you have a workable model for escaping the grasping clutches of greedy governments all over the world, especially those whose systems of exploitation are rooted in analog anachronisms like Keynesian-style macroeconomic planning.
In a laissez-faire world, the advent of the digital revolution would have inspired double-digit growth like we see in many other countries today. In the American case, the government has been stealing so many of the gains that our heads are barely above water.
It is one of history’s great missed opportunities. In the Gilded Age, with relatively little regulation and taxation — plus a gold standard and a Congress that was restrained by it — innovations led to growth like we have never seen before or since in the United States. (See Thomas DiLorenzo’s How Capitalism Saved America.)
In these years between 1870 and the end of the century, lives lengthened dramatically. Per capita income soared. Innovation beget innovation. Wealthy, successful entrepreneurs were national heroes. A new model for building civilization through trade and commerce captured the imagination of an entire culture.
The things that were amazing back then were railroads, wide availability of steel, communication improvements, electricity and the possibility of commercializing automobiles and flight. That was all great stuff that showered humanity with unimaginable blessings.
But in our times, our things are even more amazing. We are all using miracle technologies we keep in our pockets that presidents couldn’t have accessed 10 years ago. We have more computing power in our digital devices than existed anywhere in the world in the 1990s. The whole world is universally and instantly networked. What’s more, the prices are falling and falling for all these things.
It’s a hinge of history, a new world. You would have to try pretty hard to prevent a moment like this from giving rise to historic levels of economic growth. And it has in countries like China, India, Turkey and Ethiopia. Indeed, a quick look at World Bank charts shows that 150 nations of the world are growing at faster rates than the United States.
Where is the outrage? It is there, but it is entirely misplaced. Opinion culture is decisively in favor of even more looting of more private wealth. According to the Institute on Taxation and Economic Policy, the top 1% of earners are funding 21.6% of all taxes taken by governments at all levels. This is wildly disproportionate. Yet a dominant policy idea out there is to loot the 1% ever more, and rope the digital economy into the planning apparatus.
It is not a scandal that Google and Apple have discovered fancy ways to reduce the extent to which they are being looted by the tax state. The real scandal is that they have to spend so much money and energy finding ways to keep the money they make. They are serving us; our governments are looting them.
If we want to restore prosperity and bring to the United States some of the economic growth other countries are enjoying, a first step would be to dramatically cut corporate taxes from their current confiscatory level. If we want to avoid the injustice of double taxation (never forget that individuals are paying too!), the right level should be zero.
A change to zero corporate taxation in the United States would bring an instantaneous end to the Double Irish.