Tax cuts, particularly for businesses, rolling out this year are expected to give dramatic boost to the economy.
Great news, if you live in Germany.
I love to see real world examples of economic theory. We’ve all been part of a huge demonstration of the forces of supply and demand since Hurricane Katrina as the price of oil and gas has gyrated up and down the spectrum. People bitch and moan about the price for a gallon of gas and I, being the weirdo I am, study them and try to suss out their decision process.
If you will recall, right after Katrina, the gas pipelines that supplied us here in North Carolina were shut down. Immediately, the price went from about $1.80 or so to as much as $5 in some places. I had filled up the day before because I had to drive to Burlington in the morning, about 90 minutes away. Gas that morning as I left town was still about $1.80. When I rolled into Burlington, prices were up around $4.50. I switched to a news channel on the radio and heard what was going on and immediately pulled in to the nearest gas station to top off. (Of course, they were telling everyone not to do that, but I drove for a living then and some places were already out of gas, so I couldn’t risk not having gas.) The gas station was no busier than it ever was and that was what was so interesting to me. People either didn’t need gas or were so shocked by the increase that they muttered to themselves about getting ripped off and drove on in search of cheaper gas. The latter point was proven to me as I was filling up. A little ol’ blue haired lady pulled in behind me. She sat up so she could see over the car door and I watched her study the price on 3 or 4 pumps as she looked for a lower price, each time shaking her head. Eventually, she left the station. She didn’t understand that we were not in a position to shop for cheap gas, we had to worry more about getting gas at all.
Which brings me to an observation that I have made and it is that we, as a country, have lost our survival instinct. We are so cosseted, so far from having to make decisions about food, water and shelter (and transportation) that we cannot even recognize when one of those things is about to disappear. Because these things are so easy to come by in America, we do not really get too agitated when our property is threatened. Kind of like it is now by our congress. Yes, people are pissed off and we are all supposedly poised to vote the bums out. The town halls of last August were a thing of beauty. This is a thing of beauty:
But in the end, we have to take action. Obama and the congressional Democrats are clearly ignoring us. They seem the think that they are only there to represent the nutroots and not the whole country. We must keep the pressure on them, we must be unrelenting. We cannot take our eyes off of them, not for one minute, because they will duck into a smoke filled room and pull off some shit. They’re doing it right now on health care. They’ll pay at the polls next time around, but we have to make them pay every day between now and then. Write them, email them, call them. Do not back down.
Back to Germany. The critics there are going after Angela Merkel, as could be predicted. Merkel has cut individual taxes, among other things, though not by a whole lot. I am not conversant with the German economy, so do not know if they are in as bad a way as we are. I assume so, since the whole world is pretty much in the shitter right now. But this is a perfect chance to see the theories of Hayek and Friedman played out against the theories of Keynes.
I wish we were getting the Hayek/Friedman treatment. Germany will recover quicker than we will. Just watch.
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