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The Case in Support of HIgh Taxes and Big Government[W:261:356]

Glen Contrarian

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Today, what kind of nations are the most successful? What nations' populations have the highest standards of living, the longest life expectancies, the highest levels of education, the greatest ability to travel to outside their nations' borders? For those who pay attention - and particularly for those who have had the opportunity to travel in this world - the answer's obvious: the First-World nations. Today, there are two sets of First-World nations: (1) the socialized democracies such as England, France, Japan, Australia, and America, and (2) certain nations belonging to OPEC. All other nations have a lower standard of living, generally lower levels of education, and are limited in their populations' abilities to leave the nation.

There are outliers in almost any statistical analysis that involves humans, and for the purposes of this article, the First-World OPEC nations - Saudi Arabia, UAE, Qatar, and Bahrain - will be considered statistical outliers due to their vast wealth per capita.

So that leaves us with the socialized democracies of the world. To be sure, being a socialized democracy does not guarantee First-World status, but the status of the world would seem to indicate that (unless one lives in certain OPEC nations) if one doesn't live in a socialized democracy, one will not be living in a First-World nation. Why is that? We're told by those who admire austerity economics that high taxes and comprehensive regulation are a sure path to economic downfall, but that hasn't happened even though all the world's First-World socialized democracies (except for America) have had high taxes since WWII. In fact, America's top marginal tax rate most of the 1950's was ninety-one percent. Not only did we not go through a depression in the 1950's, but we also fought a relatively major war, built the interstate freeway system, and nearly paid off the entire debt from WWII even though it was (relative to GDP) higher than our debt is today!

If high taxes are so bad, then why is it we were able to do all that with an admittedly hideously high top marginal tax rate? I mean, if we listen to the conservatives, such a high top marginal tax rate should have driven us into a second Depression - but it didn't. Quite the opposite, in fact. To be sure, very few of the nation's multi-millionaires to whom that top marginal tax rate applied paid that entire amount; instead, I'd say it's much more likely that most of them invested their millions in income back into the businesses that made them rich to begin with. Instead of paying ninety-one percent of their income, they grew their businesses, and they made even more money as a result! But the key is, that was the choice they were given by the government, and our whole nation profited greatly as a result.

What about 'job-killing' business regulations? For the most part, those regulations don't kill jobs - they help protect them. If BP had followed regulations prior to the Gulf oil spill - which would have cost them about half a million dollars - they wouldn't have had the spill and would have saved billions in fines and billions more in lost revenue. Yes, there are lots of examples of how regulations weren't just bad, but silly - but if having comprehensive business regulation were a bad thing, then Japan and Germany - perhaps the two most tightly-regulated business economies in the world - wouldn't have the third- and fourth-largest economies in the world.

But what about the other side of the coin? Why aren't those nations that have low taxes and little regulation more successful? Sure, one could point to China - but China's not a First-World nation. They may soon have the largest economy in the world, but their standard of living of the general population is substantially lower than that of Greece. What's more, most of their low-level government employees are paid very little, unlike all the First-World socialized democracies wherein most low-level government workers are still part of the middle class. And frankly, I can't think of a single case in a First-World socialized democracy where a major corporation has had to install suicide-prevention nets around its buildings. But what about the rest of the low-tax, low (or no) regulation, small-enough-government-to-drown-in-a-bathtub nations? Why aren't their economies booming?

Because in order to truly grow an economy, a nation needs a healthy, fully-funded government. If that were not so, then there would not be any socialized democracies in the First World. Government should not be in business, but government should regulate business, and should never allow businesses to grow to be "too big to fail". A government that is too weak is every bit as bad as government that is too strong - indeed, a strong government is the only protection anyone has against the vagaries of Big Business. When there is a major oil spill, an airliner crash due to maintenance failures, a chemical spill that kills people or causes birth defects, or a rash of mortgage foreclosures on false pretenses, a government that is too weak will not be able to bring those errant businesses to heel, much less be able to ensure that such businesses will not commit such crimes in the future.

What's more - and this is what will make most conservatives' heads explode in concert - relatively very little of a nation's tax revenue is truly wasted. Yes, you read that right - very few of our tax dollars are truly wasted. The conservative argument goes that we should enforce fiscal discipline, that a household that spends more than its income will soon be bankrupt. But that's a faulty metaphor. Why? Because the only tax revenue that America wastes is that which leaves our borders. Period. All other government spending is within our borders and helps our economy to grow. Think about it - when a single mother spends food stamps to feed her kids, is that money somehow disappearing down a hole? Of course not. Instead, not only does she and her children get to eat, but the business gets the money from the government. They use that money to pay their people and to pay their expenses - to restock their shelves, to pay their utilities...and to pay their taxes. The benefit is that much greater for government employees like teachers and police and firefighters - not only do they get paid to do their jobs that are crucial to the community's health, but their paychecks are helping to keep the community's businesses afloat.

Does this mean that we should all be government workers? Of course not! Government doesn't belong in running supermarkets or shopping malls or fast-food restaurants. Government doesn't belong in local car dealerships or lumber mills or cotton farming. Where the profit motive should be, government should not be. Likewise, where the profit motive should not be, government must take the lead. The profit motive doesn't belong on the battlefield or in the classroom or in the prison. The profit motive doesn't belong in the police station or the fire station or in the hospital or in the pharmacy (where, thanks to the Republicans, the U.S. government is the ONLY entity that is not allowed to negotiate for lower prices for pharmaceuticals). Government should regulate businesses, yes, but government should not run businesses...and businesses should not run government. Strong businesses are crucial to a First-World nation's economic health - and so is a strong government. If that were not so, then the socialized democracies that comprise most of the First World today...wouldn't be First-World nations.
 

froggigger

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Re: The Case in Support of HIgh Taxes and Big Government

You're going to have to break all that down into smaller chunks. It would take days to adequately address everything that was in your post, and it would be so long probably no one would bother to read it.
 

head of joaquin

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Re: The Case in Support of HIgh Taxes and Big Government

Conservatives need small words and bumperstickers to address issues. We know, we know.


Good OP. A robust public sector with lots of input from democratic institutions is the sine qua non of a modern economy. That's why conservatives hate Big Gummit. They hate modernity.
 

froggigger

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Re: The Case in Support of HIgh Taxes and Big Government

Conservatives need small words and bumperstickers to address issues. We know, we know.


Good OP. A robust public sector with lots of input from democratic institutions is the sine qua non of a modern economy. That's why conservatives hate Big Gummit. They hate modernity.

flyswatter.jpg
 

Fenton

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Re: The Case in Support of HIgh Taxes and Big Government

Plenty of misleading generic left winv talking points in that mess.

I'll address one, the high marginal tax rates of the 50s era.

The author of the Op should do just a bit of research before posting misleading data.

A very small fraction of a fraction of Americans actually paid that.
 

head of joaquin

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Re: The Case in Support of HIgh Taxes and Big Government


complete-sr.jpg
 

head of joaquin

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Re: The Case in Support of HIgh Taxes and Big Government

Plenty of misleading generic left winv talking points in that mess.

I'll address one, the high marginal tax rates of the 50s era.

The author of the Op should do just a bit of research before posting misleading data.

A very small fraction of a fraction of Americans actually paid that.

Yeah, the rich. That's kind of the point.

But even taking into consideration the effective rate, it was still about 50%, much higher than today.

So that rightwing meme won't fly, sorry.
 

Glen Contrarian

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Re: The Case in Support of HIgh Taxes and Big Government

Plenty of misleading generic left winv talking points in that mess.

I'll address one, the high marginal tax rates of the 50s era.

The author of the Op should do just a bit of research before posting misleading data.

A very small fraction of a fraction of Americans actually paid that.

I did address precisely that. I said: "To be sure, very few of the nation's multi-millionaires to whom that top marginal tax rate applied paid that entire amount; instead, I'd say it's much more likely that most of them invested their millions in income back into the businesses that made them rich to begin with. Instead of paying ninety-one percent of their income, they grew their businesses, and they made even more money as a result! But the key is, that was the choice they were given by the government, and our whole nation profited greatly as a result."

And while you're at it, feel free to try to explain why ALL the non-OPEC First-World nations are socialized democracies.
 

Fenton

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Re: The Case in Support of HIgh Taxes and Big Government

I did address precisely that. I said: "To be sure,
very few of the nation's multi-millionaires to whom that top marginal tax rate applied paid that entire amount; instead, I'd say it's much more likely that most of them invested their millions in income back into the businesses that made them rich to begin with. Instead of paying ninety-one percent of their income, they grew their businesses, and they made even more money as a result! But the key is, that was the choice they were given by the government, and our whole nation profited greatly as a result."

And while you're at it, feel free to try to explain why ALL the non-OPEC First-World nations are socialized democracies.

Because they have yet to evolve into. Capitalist Democratic Republics.

That was easy.

Honestly, you can't seriously be advocating for the Socialist blight that is running rampant in Western Europe right now, can you ?

Socialism survives only as a dysfunctional parasitic promise UNTIL there's a economic correction like the collapse of the Democrat mandated Sub-Prime Bubble in 2008.

Then we find out that the only way Socialsim can be perpetuated is by the financing of future revenue and just plain corruption on a National level.

The European Union was put together with the false pretense of nations staying within the confines of the Maastricht Treaty.

It didn't work, it COULDN'T work as Countries found ways around the treaty through various accounting tricks and lies and hid their insolvency from the world.

They ran out of money..* SHOCK !! *

So now we have leftist who have latched on to the fallacies of MMT theory with those who truly understand the seriousnes of the issue pushing ahead with " austerity ".

And a American President whose so married to a corrupt ideology that he fails to notice the destruction from his Socialist like policies.

I can't believe there are people that envy the Europeans in any way.
 

Glen Contrarian

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Re: The Case in Support of HIgh Taxes and Big Government

Because they have yet to evolve into. Capitalist Democratic Republics.

That was easy.

Honestly, you can't seriously be advocating for the Socialist blight that is running rampant in Western Europe right now, can you ?

Socialism survives only as a dysfunctional parasitic promise UNTIL there's a economic correction like the collapse of the Democrat mandated Sub-Prime Bubble in 2008.

Then we find out that the only way Socialsim can be perpetuated is by the financing of future revenue and just plain corruption on a National level.

The European Union was put together with the false pretense of nations staying within the confines of the Maastricht Treaty.

It didn't work, it COULDN'T work as Countries found ways around the treaty through various accounting tricks and lies and hid their insolvency from the world.

They ran out of money..* SHOCK !! *

So now we have leftist who have latched on to the fallacies of MMT theory with those who truly understand the seriousnes of the issue pushing ahead with " austerity ".

And a American President whose so married to a corrupt ideology that he fails to notice the destruction from his Socialist like policies.

I can't believe there are people that envy the Europeans in any way.

You haven't been paying attention, have you? The European nations that most strongly went for austerity after the Great Recession are the ones in the biggest trouble - Greece, Spain, England, and Italy. The rest of the nations may not be recovering as well as America did, but America had this little something they didn't - it was called the STIMULUS PACKAGE. And even the IMF is starting to admit that austerity was a mistake.

And on top of all that, guy, think on this - all the First World nations are STILL First World nations even with everything that happened in the Great Recession - their populations are STILL far better off than those in Third-World nations whose economies operate mostly on libertarian principles. I've spent quite a bit of time and own a house in one such nation - I do have a clue as to what life is like in a Third-World nation, and yes, most Third-World economies are build on low taxes and almost no regulation and no worker rights and Big Business is completely unfettered, just like how America's conservatives think we should operate...and the nation still gets nowhere.

Oh, yeah - there's one more thing: look at all the First-World socialized democracies that either weren't touched by or recovered quickly from the Great Recession: Australia, Germany, Switzerland, Sweden, Norway, South Korea, Taiwan, and a certain nation right next door - Canada! They're all doing quite well, thank you very much!

And I notice you haven't pointed out why NO nations - none, zero, nada, ZILCH - that operate with low taxes and little or no regulation have made it to first-world status. Think on this, guy - in baseball, who do you bet on? Do you bet on the ones who operate the way you think they should? Or do you bet on the ones who WIN? So it goes with nations - all the First World nations have something in common, and that in and of itself should give you a clue as to what it takes to become a First World nation.
 

StringBean

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Re: The Case in Support of HIgh Taxes and Big Government

Excellent post.

It makes me wonder though: since America has been relatively low-tax and small-government (in terms of public sector employment and regulation), compared to the other First-World nations, are we as the dominant economic force the "outlier" or the "ideal?"

In other words, haven't we struck the perfect balance, evidenced by our unparallelled economic dominance over the past half-century? Why should we think that a European model, more heavily dependent on government, would somehow improve on what has served us so well?
 

OpportunityCost

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Re: The Case in Support of HIgh Taxes and Big Government

You haven't been paying attention, have you? The European nations that most strongly went for austerity after the Great Recession are the ones in the biggest trouble - Greece, Spain, England, and Italy. The rest of the nations may not be recovering as well as America did, but America had this little something they didn't - it was called the STIMULUS PACKAGE. And even the IMF is starting to admit that austerity was a mistake.

And on top of all that, guy, think on this - all the First World nations are STILL First World nations even with everything that happened in the Great Recession - their populations are STILL far better off than those in Third-World nations whose economies operate mostly on libertarian principles. I've spent quite a bit of time and own a house in one such nation - I do have a clue as to what life is like in a Third-World nation, and yes, most Third-World economies are build on low taxes and almost no regulation and no worker rights and Big Business is completely unfettered, just like how America's conservatives think we should operate...and the nation still gets nowhere.

Oh, yeah - there's one more thing: look at all the First-World socialized democracies that either weren't touched by or recovered quickly from the Great Recession: Australia, Germany, Switzerland, Sweden, Norway, South Korea, Taiwan, and a certain nation right next door - Canada! They're all doing quite well, thank you very much!

And I notice you haven't pointed out why NO nations - none, zero, nada, ZILCH - that operate with low taxes and little or no regulation have made it to first-world status. Think on this, guy - in baseball, who do you bet on? Do you bet on the ones who operate the way you think they should? Or do you bet on the ones who WIN? So it goes with nations - all the First World nations have something in common, and that in and of itself should give you a clue as to what it takes to become a First World nation.

I wondered if you were going to address the Pacific region countries that are growing and doing well.

What position do you see Japan in? India? I see India as the country to blunt China's growth and dominance in the Pacific but Im not sure what role Japan, Korea and some of the other Asian countries will play in that fairly volatile area.
 

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Re: The Case in Support of HIgh Taxes and Big Government

I am wondering why you are basing your argument on the term "first world" which is a bit outdated and nonspecific. Why don't you instead look at GDP per capita and maybe you'll see the folly in using "first world" as a metric for success? There are quite a few countries that do very well that are low tax, low regulation. See Singapore and Hong Kong as examples. There are quite a few countries that have very loose business regulations like Australia that do quite well. You realize that at one point all the "first world" countries were monarchies also right? We started with a decentralized government and progressed towards a more centralized government. They started as THE MOST CENTRAL GOVERNMENT YOU CAN HAVE and have progressed towards democracy so what do you expect them to be?
 

fmw

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Re: The Case in Support of HIgh Taxes and Big Government

I don't have time to write a book, OP, but basically, we have done well despite high taxes and big government, not because of them. We would likely have done even better without them. Because you see two situations doesn't mean one caused the other.
 

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Re: The Case in Support of HIgh Taxes and Big Government

I don't have time to write a book, OP, but basically, we have done well despite high taxes and big government, not because of them. We would likely have done even better without them. Because you see two situations doesn't mean one caused the other.

Agreed.. I know many people on the right or left won't like to hear this.. but it is possible that the type of government one has isn't the only or even the best predictor of economic success.
 

Glen Contrarian

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Re: The Case in Support of HIgh Taxes and Big Government

I don't have time to write a book, OP, but basically, we have done well despite high taxes and big government, not because of them. We would likely have done even better without them. Because you see two situations doesn't mean one caused the other.

Mm-hmm...So America made it despite high taxes and big government. And so did:

England
Germany
Japan
Switzerland
South Korea
Taiwan
Australia
Canada
Sweden
Norway
France
Spain
Italy
Greece
Portugal
Israel
Belgium
Netherlands
Denmark
Luxembourg
...

And here's ALL the non-OPEC nations that made it without high taxes and big government:

*crickets chirping*

But of course you don't see a particular pattern here. Why? Because to acknowledge a pattern would force you to acknowledge that your personal paradigm isn't as accurate as you'd like to think.
 

Glen Contrarian

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Re: The Case in Support of HIgh Taxes and Big Government

I am wondering why you are basing your argument on the term "first world" which is a bit outdated and nonspecific. Why don't you instead look at GDP per capita and maybe you'll see the folly in using "first world" as a metric for success? There are quite a few countries that do very well that are low tax, low regulation. See Singapore and Hong Kong as examples. There are quite a few countries that have very loose business regulations like Australia that do quite well. You realize that at one point all the "first world" countries were monarchies also right? We started with a decentralized government and progressed towards a more centralized government. They started as THE MOST CENTRAL GOVERNMENT YOU CAN HAVE and have progressed towards democracy so what do you expect them to be?

Whaaaaaat????? You're calling Singapore and Hong Kong as "low tax, low regulation"? Dude, while they have lower taxes than we do, they are both HIGH regulation city-states - and being retired Navy, I've been to both several times. Most telling, both are CITY-STATES, and you can't use them as examples for how to address the challenges that face a nation. If America were completely urbanized - as both Hong Kong and Singapore are - then maybe you could. But neither city-state has appreciable rural areas (much less long borders to defend). You can't compare them to nations.

And NO, not all the "first-world" nations were monarchies to begin with - like Switzerland, for one. Then there's Germany - which hadn't existed as a whole nation for over forty years until it united in the early nineties - and Japan, where the monarchy has been effectively toothless for centuries, and was utterly devastated in WWII. Yes, the Marshall Plan helped both West Germany and Japan get off the ground after WWII, but their success since then was THEIR doing...and the same can be said for South Korea...and especially Taiwan, which built itself up without any help from a Marshall Plan.

And dude - have you been to Australia much? No, they do NOT have "very loose business regulations". If you want loose business regulations, go to almost any third world nation and live there for a while, and you'll see them first hand.
 

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Re: The Case in Support of HIgh Taxes and Big Government

Whaaaaaat????? You're calling Singapore and Hong Kong as "low tax, low regulation"? Dude, while they have lower taxes than we do, they are both HIGH regulation city-states - and being retired Navy, I've been to both several times. Most telling, both are CITY-STATES, and you can't use them as examples for how to address the challenges that face a nation. If America were completely urbanized - as both Hong Kong and Singapore are - then maybe you could. But neither city-state has appreciable rural areas (much less long borders to defend). You can't compare them to nations.

And NO, not all the "first-world" nations were monarchies to begin with - like Switzerland, for one. Then there's Germany - which hadn't existed as a whole nation for over forty years until it united in the early nineties - and Japan, where the monarchy has been effectively toothless for centuries, and was utterly devastated in WWII. Yes, the Marshall Plan helped both West Germany and Japan get off the ground after WWII, but their success since then was THEIR doing...and the same can be said for South Korea...and especially Taiwan, which built itself up without any help from a Marshall Plan.

And dude - have you been to Australia much? No, they do NOT have "very loose business regulations". If you want loose business regulations, go to almost any third world nation and live there for a while, and you'll see them first hand.

My appologies for not being more clear but since I was speaking about GDP, I am refering to economic regulations, not civil rights issues. These countries are exactly as I describe. Hence why they are number #1, #2, and #3 on the low tax, low regulation supporting heritage foundation's list of most economically free countries.
 

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Re: The Case in Support of HIgh Taxes and Big Government

My appologies for not being more clear but since I was speaking about GDP, I am refering to economic regulations, not civil rights issues. These countries are exactly as I describe. Hence why they are number #1, #2, and #3 on the low tax, low regulation supporting heritage foundation's list of most economically free countries.

1. Compared to any third-world nation you care to name, they're both QUITE regulated...which is why, when you go to either place you see clean, swept cities, nice smooth roads, safe neighborhoods to walk - all these require REGULATION and a healthy tax structure. You'll never go find a place with Really Low Taxes that has roads that compare to those of a first-world nation, because roads cost lots of taxpayer dollars.

2. You're still trying to compare CITY-STATES to NATIONS - and that's not even comparing apples to oranges. It's more like saying, "This molehill seems to be working out quite nicely - why can't that mountain be like this molehill." City-states don't face the same challenges as nations - Hong Kong's been under the protection of England (and America) and and China since it was founded and hardly counts as an independent entity. Singapore only received its independence from England in 1963. Both were made major centers of commerce not by their own efforts, but by those of the major nations that ensured their viability.

Okay? Try comparing apples with apples, and mountains with mountains.

And btw, you mentioned Australia. Last year, the Australian government raised minimum wage to A$15 an hour (about $15.30 USD). It's more than double the federal minimum wage in the United States. VERY nice place - you should visit there sometime. Perth is a lot like San Diego (only nicer), and Hobart (Tasmania) is a lot like Everett, Washington (only nicer).
 

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Re: The Case in Support of HIgh Taxes and Big Government

You haven't been paying attention, have you? The European nations that most strongly went for austerity after the Great Recession are the ones in the biggest trouble - Greece, Spain, England, and Italy.

All those nations increased taxes. What they didn't do was dramatically cut government.

So yes :) I agree with you here. If you have big government, and you choose to keep that big government and increase taxes, you are in trouble :D

The rest of the nations may not be recovering as well as America did, but America had this little something they didn't - it was called the STIMULUS PACKAGE.

Actually Europe and China both had stimulus spending. And according to the CBO, the only long-term effect of the Stimulus Package is reduced economic growth and higher debt.

Oh, yeah - there's one more thing: look at all the First-World socialized democracies that either weren't touched by or recovered quickly from the Great Recession: Australia, Germany, Switzerland, Sweden, Norway, South Korea, Taiwan, and a certain nation right next door - Canada! They're all doing quite well, thank you very much!

Wait. You do realize that 15 years ago Canada started slashing government spending and taxes - that their corporate tax rate is less than half of ours? That Switzerland, Canada, Australia, Singapore, New Zealand - all these places that are doing well have higher levels of economic freedom than we do? That Germany has a balanced budget amendment?

And I notice you haven't pointed out why NO nations - none, zero, nada, ZILCH - that operate with low taxes and little or no regulation have made it to first-world status.

You are confusing "small" government with anarchy. Typical of those whose vision of government knows no limits. However, since you asked, feel free to study the history of Hong Kong.
 

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Re: The Case in Support of HIgh Taxes and Big Government

1. Compared to any third-world nation you care to name, they're both QUITE regulated...which is why, when you go to either place you see clean, swept cities, nice smooth roads, safe neighborhoods to walk - all these require REGULATION and a healthy tax structure.


Ah, no. You can regulate clean streets all you like - what it takes is A) effective governance and B) strong social norms against trash dumping.
 

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Re: The Case in Support of HIgh Taxes and Big Government

Ah, no. You can regulate clean streets all you like - what it takes is A) effective governance and B) strong social norms against trash dumping.

I included smooth roads in the mix, guy - so care to show me a low-tax, low-regulation country where the roads are as nice as they are in any first-world nation?

No, you can't.
 

sangha

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Re: The Case in Support of HIgh Taxes and Big Government

My appologies for not being more clear but since I was speaking about GDP, I am refering to economic regulations, not civil rights issues. These countries are exactly as I describe. Hence why they are number #1, #2, and #3 on the low tax, low regulation supporting heritage foundation's list of most economically free countries.

It's not just a matter of regulations that hinder business. Laws that promote business, and policies that result in govt intervention in the market, are both "bad" according to the nonsense that the right wing spews

Both HK and Singapore have govts that are actively involved in the market. Singapore has a policy to promote home ownership (is subsidies), electrification (again, subsidies), laws which offer strong protectors to investors in corporations, etc

IOW, the ease of starting and running a business does not support the rightwing position if that ease is the result of govt policies and intervention in the marketplace.
 

sangha

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Re: The Case in Support of HIgh Taxes and Big Government

Ah, no. You can regulate clean streets all you like - what it takes is A) effective governance and B) strong social norms against trash dumping.

Thanks for admitting that the free market can't do it
 

CanadaJohn

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Re: The Case in Support of HIgh Taxes and Big Government

No true conservative I know has any problem with the principles of good government and paying taxes. What we object to is the liberal version of government that believes it and only it has the answers for everything, wastes taxpayer dollars trying to prove it, and wastes far more taxpayer dollars trying to cover-up or correct their billion dollar blunders.

If government stuck to the role it serves best, there'd be nobody complaining about government and everyone's taxes would be reasonable and provide good value for money.
 
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