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.
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.