Wednesday, August 11, 2010

Drummond’s Rules of Economics and Politics

The coming election is about the economy, no matter what the political-party-about-to-be-hit-with-a-ton-of-voter-rage claims. Oddly, this is the same myopia which blinded the other political-party-slammed-for-missing-the-obvious in 2006 and 2008; seems to be common for D.C. to be D.O.A. on the basics. There needs to be some basic primer about how money works in political terms, so I offer the following basic rules which drive the political consequence of money:

1. Everything has to be paid for

It’s quite fashionable for politicians to promise whatever the public wants, or at least the targeted voter bloc. But sooner or later, the services and goods have to be paid for, and with real money. Delaying the inevitable only adds interest costs to the total.

2. Taxpayers pay for everything the Government buys

Don’t be fooled when some official tries to say there will be no tax increase for a program, or that it will be paid from by another government or corporation. Other governments serve groups of taxpayers who won’t accept higher taxes either, and eventually the cost will come back around to your country again and hit the citizens. As for corporations, these are made up of people who don’t like paying taxes, and so a corporate tax will result either in higher prices, lower employment, or both.

3. People never like taxes

Joe Biden is a liar and a moron. No one, absolutely nobody will pay a penny more than required in taxes. Folks will pay what they feel they must, they may make virtuous noises to feel better about paying, and they may form mobs and demand that some certain person or group should be made to pay more in taxes, but no one chooses to pay more than they believe they have to pay.

4. Politicians lie to you about how much you have to pay

Politicians will either promise that your taxes will go down, or if taxes must go up, that someone else will have to pay more. Knowing how much people hate paying taxes, no politician planning to stay in office will ever tell you directly that he expects you to pay more.

5. There will never be a system where everyone pays a 'fair' amount of tax

There are several reasons for this fact. First, it’s impracticable in any medium-to-large country, since people will constantly try to reduce the taxes they pay, through resistance, political and legal actions, or just plain evasion and avoidance tactics. Second, no government truly wants a transparent system for collecting taxes, as this will inevitably lead to comparison, complaint, argument and further questions about who gets paid and why. By playing groups against one another, adjusting one group’s tax rate up or down to make it more ”fair”, governments distract the public from figuring out how much it is really gouging them.

6. Revenue is dependent on the health of the economy more than any other factor

This is sometimes missed when planning growth and forecasting revenue, whether by companies or governments. You need a healthy economy overall, in order for your goods or services to produce revenue. For tax purposes it is even plainer – you cannot collect money which is not there. Consequently,

7. The only functional tax rate is the one which maximizes revenue with the least interference with the economy

This is not a new idea. Remember the story warning not to kill the golden goose? The idea is that you pay attention to how folks are doing before you tell them they need to pay you more money. At the very least, tax increases (and ending prior tax cuts are tax increases, semantics won’t save you) should never happen when the economy is in decline, especially during a recession, and only a brain-dead moron would consider them when unemployment is 7% or higher. To bring in tax revenue, you need to spur job growth, because only when people have jobs can you get income tax from them. And to spur job growth, you have to lower the tax rate. Here’s why – the cause of every economic crisis always comes down to consumer confidence. When people stop buying things, the economy collapses, it’s really that simple. And when taxes are high, people worry about them and spend less, which causes businesses to slow down and fail. When businesses slow down, they lay off employees, which obviously raises unemployment. A low tax rate with low unemployment is better for revenue than a higher tax rate with a higher unemployment rate, as should be patently clear. There is a floor rate beyond which revenue fails to improve, but it is undeniable that in any recession, the most effective means to improve employment, and in so doing improve revenues from taxes, is to reduce the tax rate.

Monday, August 09, 2010

Thoughts on An Unsatisfactory Victory

I’m pretty freaking lucky. Sometimes in a gruesome way, however. One of those ways is the way my cancer was discovered in 2006. The short version is this sequence of events:

1. A kidney stone forms in my urinary tract.
2. I pass said kidney stone.
3. Not being an imbecile, I see my doctor, who schedules a CT scan
4. CT scan reveals I have ruptured my appendix; emergency surgery follows.
5. During the surgery, an unexpected mass is found in my abdominal cavity near the appendix. The mass is removed and sent for testing. The tests come back malignant.

So, in a span of a few days I went from being an annoying, overweight white guy to passing a kidney stone and breaking my appendix, to being diagnised with cancer.

Everything changed. For a while. I quickly experienced a range of emotions and discoveries, including an unprofessional oncologist and a surprisingly compassionate insurance company, but in the end I escaped major surgery and got to keep my hair.

Turns out I’m lucky, really lucky. My cancer was fond during surgery and oh-by-the-way I not only live in a city with one of the leading research centers on cancer, my surgeon sent my tissue samples to MDA for the initial tests.

I revisted my situation after reading about Christopher Hitchens’ own battle with cancer. It’s clear we are very different men. Mr. Hitchens is a very successful writer who has had to deal with a much harder situation than I have had to face. And yet, he too seems to be luckier than some. In my visits to MDA, I regularly see patients and their families, who are facing a much bleaker prognosis than even Mr. Hitchens has had to endure. And knowing this, I regularly face a kind of survivor’s guilt about my own good fortune. No major surgery, no chemo, no nausea, while everywhere I meet and see patients whose future is unknown, who must endure pain and doubt and the threat of death, and whose families suffer along with them. I want to help somehow, but I feel very helpless, and sometimes as if I’m wasting the time and resources of the doctors and nurses who should be focusing on people who really need help.

I have felt well for so long that by mid-2009 I began to worry that I did not have cancer at all. My oncologist ended that idea by showing me exactly where my tumors are residing; just because they’re not causing trouble at the moment does not mean they aren’t there. So while I feel like a normal person, my doctors make sure I never forget that I’m not just like anyone else. And because PMP is rare, with an unknown cause and with a very limited amount of clinical research available, there’s no guarantee that my present well-being will be permanent. That leads to some concern every time I have an unexplained pain in my abdomen or difficulty in urination or defecation. I find myself swinging from thinking that I’m overreacting, to worrying that I’m not telling my doctors something they need to know. This is important for another reason – since my cancer was found early, the doctors have been keeping records on me in hopes of learning more about PMP in the early stages. I can’t say that I’m doing much to help, but it’s better than nothing and just maybe something will come up that will help someone.

My point here is threefold – sometimes I need to vent, first of all. Second, never assume things will always be what you expect them to be, and three, there’s a reason for everything but that doesn’t mean everything will make sense when you try to figure it out.