Monday, October 8, 2012

K.I.S.S: Keep It Stable Stupid

I keep seeing this picture all over the place. Well two places, but I see it a lot. At first it appears to be a snarky backhanded attempt to discredit supply side economics. Honestly though if you think about it, its really an indictment on political intervention on the economy as well.

Cuz lets face it. You could easily add “and neither does Keynesian economics”.

Really if you think about it its simple. If taxes are too high it hampers the desire to prosper. Now not for everyone, there will always be people with drive and determination who learn how to prosper in any environment; but you can not level the playing field by taking from someone and giving it to someone else.

Back to the matter at hand though. After the bailout of GM and Chrysler, TARP, the stimulus, and Obamacare and we still have unemployment near 8%. I have an idea, why not try trickle down economics, cuz what you have been doing so far has not helped.

Essentially this picture is like saying exorcize won't get you in shape, and to prove it I'm going to eat Twinkies and sleep all day.

Will cutting taxes fix the economy? Probably not. In most cases taxes are at one of the lowest points in the last 80ish years. What will fix the economy is stability.

This isn't a joke, this isn't just my opinion. Stability fixes everything. Lets look at a few examples.

Will you buy groceries if you are unsure you are going to have a job next week? Yes yes you will, you need that to live. You may horde some cash, maybe buy more generic food over brand name items, but you will.

Will you buy a house or a car if you're unsure of your job? No, because that is a 5-30 year commitment, and without stability you can't in your right mind put yourself into that kind of debt.

The business community is pretty much the same way. Yes they are making money, yes they aren't hiring, but one of the reasons is all this speculation over the tax code, as well as new regulations. Why would you take risks if you are currently profiting, and you're unsure of the financial and regulatory market? In 6 months to a year you may need to start laying off people again.

Its simple, its all way more simple than any one makes it out to be.

All you have to do is ask yourself a few questions.

#1 Do businesses like making money?
#2 Do they want to make more money?

If you answered yes to one or both of these questions congratulations you're not an idiot.

So next time someone show's you this picture, or some other picture close to it, or just says something dumb like “trickle down economics don't work”... just say two things.

By your same metric neither does Keynesian economics.
All we need is stability, stability is the problem.


  1. is like saying exorcize won't get you in shape

    Exorcize doesn't get you into shape, but it does do a pretty good job of getting rid of demons.