Cutting Taxes Without Cutting Spending Will Destroy Your Country

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Our taxes are too high. That much is obvious. The USA has the highest taxes in the entire world if you add up all the payroll, income, corporate, sales, excise, estate, usage, and hidden taxes the typical American pays, with the possible exception of certain cities in Scandinavia which are even higher (Jesus). As I’ve explained many times before, our taxes are too high because our government is way too big and does too much.

-By Caleb Jones

This means taxes should be reduced. The lower the taxes, particularly on the middle class, the more freedom and economic activity is created, which is healthy for an economy long-term. We could argue about the merits or problems of lowering taxes on the very poor or the very rich, but that would delude this particular conversation, so I’ll stick with the middle class as my example for the moment. Everyone, even most left-wingers, tend to agree that lowing the taxes on the middle class is a good thing.

Therefore, I support tax cuts always, and everywhere, no matter what the details are. High taxes are bad, lower taxes are good, period. That being said, we have a problem. The US government spends a staggering $7 trillion a year. That’s trillion with a “T.” And it does it every friggin’ year. $7 trillion this year. Then $7 trillion next, and so on, forever, until the USA finally collapses, which it likely will.

Worse, the US federal government spends anywhere from half a trillion to 1.5 trillion more per year than it takes in as tax revenue. Many of the states are even worse. So if you cut taxes, and if those taxes end up cutting government revenue (and they may not, more on this in a minute), and you don’t cut any government spending to match the revenue decrease, you’re simply speeding the day when the USA collapses economically. This is what left-wingers scream about when right-wingers talk about cutting taxes. “You’re going to make deficits worse! How are you gonna pay for all this stuff?” They’re absolutely right. (They’re also liars, since they never scream about deficits when a left-wing president is in charge.)

Therefore, yes, you need to cut taxes, but you also need to cut spending at the same time. If you don’t, you’re just making everything else worse. You’re simply cutting taxes to ensure that either interest rates or inflation (or both) will eventually increase to cover the fact you’re still spending assloads of money you don’t have. My biggest prediction about Trump that I never shared publicly would be that he would do a “George W. Bush,” in that he would eventually cut taxes, which is very good, but would increase government spending at the same time, which is very bad. It now appears I was right. Most likely, Trump will push through some kind of tax cut while increasing spending. Tax cuts are good, but increasing spending at the same time means you’re simply slamming your foot down on the accelerator to when the USA drives off a cliff. (Not that any Trump supporters care; they care more about Trump than the future of the USA.)

Since I know the topic will come up, it’s true that sometimes tax cuts actually increase revenue to the government. This happened during a few years under George W. Bush, where he cut taxes, and tax revenue increased due to increased economic activity. That’s all well and good, but there are problems with this:

1. It doesn't matter if revenues increase unless they increase equal to or greater than the rate of government growth. If tax revenues increase by 5% or 8% while you’re increasing government spending by 10%, 20%, or more (which Bush did), you’re still fucked in the long-term.

2. The reason for most of the economic increase during the Bush years was because of economic bubbles. We all know how that turned out. Under Trump, we're under the same bubbles again. Bonds, stocks, credit, and real estate are all in bubbles! Again! So all this "economic increase" is just a bunch of BS that will blow up a little later anyway... except with government spending that is even bigger.

I still support any tax cuts since I hate paying taxes and I stopped caring about the long-term future of the USA a very long time ago. But right-wingers, Republicans, and Trump worshippers shouldn’t delude themselves into thinking that cutting taxes while not cutting government spending just as much (or more) is a good idea. It’s a terrible idea, and it will destroy your country. Want over 35 hours of how-to podcasts on how to improve your woman life and financial life? Want to be able to coach with me twice a month? Want access to hours of technique-based video and audio? The SMIC Program is a monthly podcast and coaching program where you get access to massive amounts of exclusive, members-only Alpha 2.0 content as soon as you sign up, and you can cancel whenever you want. Click here for the details.
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