Posted on 05/01/2002 7:56:43 AM PDT by TMD
April 8, 2002
Why economists are not popular
One of the many reasons why economists are unpopular is that they keep reminding people that things have costs, that there is no free lunch. People already know that -- but they like to forget it when there is something they have their hearts set on.
Economists don't have to say anything when people are buying things at a shopping mall or at an automobile dealership. The price tags convey the situation in unmistakable terms. It is when people are voting for nice-sounding things that politicians have dreamed up that economists are likely to point out that the costs which the politicians have ignored are going to have to be paid, one way or another -- and that you have to weigh those costs against whatever benefits you expect.
Who wants to put on green eye shades and start adding up the numbers when someone grandly proclaims, "access to health care for all" or "clean air" or "saving the environment"? Economists are strictly party-poopers at times like these. They are often gate-crashers too, since usually nobody asked them how much these things would cost or even thought about these issues in such terms.
Some of the more persistent or insensitive economists may even raise questions about the goals themselves. How much health care at the taxpayers' expense? In Britain, a 12-year-old girl was given breast implants. That much health care?
Meanwhile, Britain's skyrocketing medical costs of taking care of things that people would never have spent their own money to take care of forced cutbacks and delays in more urgently needed medical treatments. One woman's cancer operation was postponed so many times by the British health service that, by the time the system could take her, the disease was now too far gone for medical help -- and she died.
Economists could have told anyone in advance that making things "free" causes excessive use by some, leaving less for others with more urgent needs that have to remain unsatisfied. Rent control, for example, had led to more room being occupied by some, who would not have paid the market price for as large an apartment as they live in, while others cannot find any housing that they can afford in the city, and have to live far away and commute to work.
Clean air? There is no such thing and never has been. There is only air with varying degrees of impurities, varying amounts of which can be removed at varying costs.
Removing the kinds of things that choke our lungs or otherwise threaten our health is usually not that expensive. But science is becoming capable of detecting ever more minute traces of impurities with ever more insignificant consequences. Yet where is the politician who is going to resist calls for removing more impurities in the name of "clean air"?
Who is going to resist calls to "save the environment"? Only an economist is likely to say, "Save it from what or from whom -- and at what price?"
Bumper stickers in and around Redwood City, Calif., long proclaimed: "Save Pete's Harbor." What did that even mean? In practice, it meant letting one set of people use it as a marina and preventing other people from replacing the marina with housing.
When the Constitution of the United States says that the government owes "equal protection" to all its citizens, why should the government intervene on behalf of one set of contending citizens against another, much less call that "saving" the environment?
People have been bidding against one another for the same resources for centuries. Why replace that process with politicians' control? The 20th century was a virtual laboratory test of political control of economic activities -- and it was such a dismal failure that even socialists and Communists began abandoning that way of doing things by the 1990s.
Even when you don't realize that you are bidding against other people, you are. When you drive into a filling station and fill up your tank with gasoline, you are bidding against people who want petroleum in the form of heating oil, plastics or Vaseline.
Lunches don't get free just because you don't see the prices on the menu. And economists don't get popular by reminding people of that.
Anything that they "give" to people they have taken from other people.
At least that's what politicians want folks on the bottom half of the income scale to believe. That someone else pays.
The Individual Income Tax return(1040) that captures everyone's attention each April, is merely a partial VAT accounting sheet the government cons individuals, held at ransom, into filling out. Its misdirection puts blinders on the eyes of the voter, and totally distorts their perceptions as to the real impact of taxation in their lives.
In reality, every man woman and child in the nation pays federal taxes through a corporate VAT.
DO YOU PAY YOUR INCOME TAX
AT THE SUPERMARKET?
by D. Sherman Cox J.D. L.L.M. Taxation
The full impact of the federal tax system(taxes in gross wage/salaries & other compensation + business income/payroll taxes), added onto the base(taxfree) price of retail consumption goods and services is 36% for federal taxes alone.
All wages and the taxes on them are paid for out of sales receipts to business,(i.e. consumption expenditure).
Federal tax revenues collected as % of current family expenditure = fed/(1-state-fed-savings) =
23.5/(1-.235-0.102-0.012) = 36.09%
If we add in the cost of federal tax compliance, planning, litigation & enforcement, the percentage that truely represents the burden on the family due to the Federal income/payroll tax system, product prices are increased by more than 55% over taxfree prices.
Where Have All the Dollars Gone?
How the government robs Peter to pay him back.
By economist James L. Payne, Reason Magazine February '94When the overhead costs are added together, (24 percent compliance costs, 33 percent disincentive costs, and 8 percent other costs), they total 65 percent of tax revenue.
Current total Federal tax revenues are about $1900billion, more than $1,000 billion additional dollars are added on onto consumption prices due to the business costs of complying with the federal income/payroll tax laws.
The percent total current federal burden (taxes + compliance costs) of consumption dollars = 36*(1900+1000)/1900 = 54.95% economic burden added on to base retail(i.e. taxfree) prices.
Too bad that citizens don't get a receipt detailing those "hidden sales taxes" buried in their consumption purchases. If they ever did, some of those 70% of the public clamoring for more from government, thinking someone else foots the bill, might be tempted to change their mind.
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