If you don’t know history, you’re doomed to repeat it - Ahwatukee Foothills News: Valley And State

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If you don’t know history, you’re doomed to repeat it

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Posted: Friday, April 22, 2011 2:00 pm

For the first time in the history of the U. S., the "takers" (public sector employees) outnumber the "makers" (private sector manufacturing employees).

"Today in America there are nearly twice as many people working for the government (22.5 million) than in all of manufacturing (11.5 million). This is an almost exact reversal of the situation in 1960, when there were 15 million workers in manufacturing and 8.7 million collecting a paycheck from the government" (Wall Street Journal, April 1, 2011).

Since the "takers" produce nothing of intrinsic value, they are paid for their efforts by taking something (funds derived by taxation) from the "makers" who produce items of intrinsic value, which usually create an income stream for the "maker" as the products are sold on the open market.

So, if the "takers" outnumber the "makers," it stands to reason taxes must be kept at a high level in order to support those "takers," i.e., non-producers. As long as taxes are high, industry won't come to Arizona because those thieving scoundrels (industrialists) want to keep as much of their money as possible. Money that will be used to meet payrolls, pay taxes, purchase raw materials and generally keep the economic ball rolling by creating jobs for many more people than those at a specific location or in a specific industry. This is called "the trickle-down effect."

Therefore, when one agonizes about the corporate tax cuts enacted by our Legislature, one must consider the new industry, which lower tax rates, will attract to our fair state. As the newcomers become situated, they create jobs. They pay corporate taxes while the new employees will also pay taxes. Something of a snowball effect.

As we attract more and more industry to Arizona, tax revenue increases. And as tax revenue increases, the legislators will find ways to spend the money without thinking of the future, which usually can be counted on to have an economic slowdown because of government tampering and excessive government spending. And so it goes.

This is a concept Marxists and Keynesians don't grasp. This is the reason we're having the economic chaos we have today. Broadly speaking, some call this the law of supply and demand. It's not a zero sum game.

If you don't know history, you're doomed to repeat it.

• Don Kennedy is a graduate of Dartmouth College with a degree in sociology. He has been a resident of Ahwatukee Foothills since 2002.

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