I have been distant in the world of politics lately. I still read political news on occasion but to be honest I am completely disenfranchised by it. To me the ideas and methods purported by politicians (and then supported by the public either directly or indirectly by their silence) is mind boggling.
Let’s face it, we are a broken nation that is in debt. Anyone with an inkling of politics, economics or finances should know that spending yoru way out of debt is not only unreasonable but also an absolutely ridiculous idea. You see, spending money to make money can work for individuals or businesses and we do it all the time. Individuals will invest in certifications, testing, college, and investments in hopes that their spent money will make them something later in life. Their money investment will yield something because they hope that they will be able to produce more with their time/labor with their new skill, certification, or passing test score. A business will also invest to try to make a new product that isn’t on the market, to make a product/service more profitable (less waste) or bring marketplace recognition. Individuals and companies will spend money they don’t have in hopes that they can later make their time more profitable.
The opposite is true of governments because governments do not produce anything – unless of course you count false dreams, hostility, and potentially unfair marketplaces.
Have you ever been to the gas pump and complained about the gas prices? Sure, we all have. Many other people complain about the big, evil oil companies raking in profits. Sure, those companies have been known to be profitable – after all, we all use their products… not only in our cars but in much of our manufacturing (i.e. plastics, etc.). If we are all using their products isn’t it logical to believe that they would indeed be very profitable? Of course! This isn’t even my point of the matter though – my point is that governments get their scoop of money just simply for existing.
According to the Tax Foundation California is the second worst state for taxing gas. If one checks out California’s Gasoline Price Breakdown chart for 2013 they can see that for a $4.00/gal of gas the breakdown looks like this – $2.54 for the crude oil, $0.35 for distribution/marketing profits, $0.43 for the refinery and their profits, $0.02 for California gas tank tax, $0.09 for the state tax, $0.36 for the state excise, and $0.18 for the federal tax. To put it another way this is $2.54 for the materials, $0.78 to get it out of the ground and refine it (plus profits), and $0.65 to the government – respectively this is 63.5% for the matrials, 19.5% for producing and profits, and 16.25% for the government. If you are getting my drift here I am telling you that the government “makes” almost as much money as the oil company… yet does absolutely nothing in the process to make the product!
Repeatedly we run into this problem of budgeting. The story ends the same all the time and has for some time now – the debt ceiling is raised and spending cuts are promised for a later date. This is absolutely ridiculous and history has shown us that no budget spending cuts (at least nothing significant) will be implemented. Our government is hellbent on spending it’s way out of debt. The problem of course is that no matter what it spends it will never produce anything and if never produces anything then it will never have a return on that investment. All it can do is continue to take from those who have and give to those who do not have.
If anyone can tell me how raising taxes to give to those who do not have – whether it be in the form of stimulus checks, welfare checks, food stamps, tax refunds to those who don’t pay taxes, or free health care – will bring us out of debt I’d be glad to listen.