More misdirection…

In another quote from the President’s speech at George Washington University, he goes on to reach out to the smooth brained among us when he says the following:

“They want to give people like me a two hundred thousand dollar tax cut that’s paid for by asking thirty three seniors to each pay six thousand dollars more in health costs? That’s not right, and it’s not going to happen as long as I’m President.”

This would be true if the economy were as simple as a single pie. If this were the case, whenever anyone took a piece of pie, there would obviously be less to go around for everyone else. [This fact is a demonstration of a Zero-Sum Gain where the total of the gains and losses in a situation will always zero out. –i.e. If I get one pie (+1) and you lose the pie (-1) the sum of this dealing is zero.

What the President fails to understand here is that the economy is slightly more complex than sharing a pie. In economic terms, if the demand on pie slices goes up and making pies becomes more profitable, more pies will be made. This means that my ability to buy and desire for pie can result in a greater amount of pie for everyone.

It is the penalties and taxes on the pie-maker in this situation that may artificially introduce into the transaction the idea of the zero-sum. If, as a pie-maker, I see that investing more of my time and money into the production of pies will increase my income to a point I feel is worthwhile I may do so. This increase can take the form of longer hours or additional employees. If, however, taxes and regulations are systematically increased on my new income to such an extent that my increased work produces a lesser gain than I feel would justify the expense of time, money, or the addition of employees to my company, then run the risk of losing out on true economic growth.

In the end, please try to remember that the President, when he talks about taking money away from the poor or the sick, is really saying is that he does not want to allow people who earn the money to decide how it is used. The President ultimately does not want the federal government to lose the ability to decide where the confiscated money goes.