Remember, low taxes + low spending = growth

Georgia is one of eight states projected to gain congressional seats after the 2010 census numbers are tallied. Recently, Barbara Hollingsworth of the Washington Examiner wrote an editorial analyzing the tax policies of those eight states compared to the states which are projected to lose representation and guess what? Barbara discovered that people are fleeing states with high taxes and high spending. Surprise, surprise!

The article points out, “The state and local tax burden is nearly a third lower in states with growing populations… As a result, per capita government spending is also lower: $4,008 for states gaining congressional seats, $5,117 for states losing them.” In addition to tax policies Barbara Hollingsworth also points out that many of the states also have right to work laws that entice businesses to relocate from less friendly states. The article isn’t very long and you can read it here:

So we see that relatively low taxes and government spending have a direct correlation to Georgia’s tremendous growth over the past few decades. The majority of voters in Georgia understand this instinctively but I’m not sure the state’s current power structure quite gets it.

What most of us know that politicians don’t

Life is not fair.

It just isn’t.

Innocent children die every day. That isn’t fair. Hookers are caught with governors and get rich as the celebutante of the day. That isn’t fair. Hardworking people are layed off on Christmas Eve. That isn’t fair. Human beings don’t like unfairness but most of us realize that unfairness is indeed a fact of life. Why don’t politicians?

About thirty years ago President Jimmy Carter decided that it was unfair that everyone in the United States couldn’t own their own home so he decided that the government should fix the problem. The federal government encouraged banks to give mortgages to people that had never owned their own home before. How fair. In the 1990’s Janet Reno threatened banks that had not made enough loans in economically challenged areas. Banks made more loans in those areas and then sold them to investors with the understanding that the United States government would pick up the tab if the homeowners couldn’t pay.

Everybody was happy. People that historically could not afford homes bought houses. People that already owned homes bought newer and bigger houses. Then lenders came up with more “innovative” loans which could get more people in homes and let everyone buy bigger and better houses. People were full of glee as home prices continued to rise and more people owned homes. Life was more fair and politicians patted themselves on the back for the great thing they had done.

Then the people who could not have bought homes thirty years ago started to default on their mortgages. Uh-oh. Statistically it was inevitable. Banks knew thirty years ago that a certain percentage of these homeowners wouldn’t be able to afford their houses. That’s why the banks didn’t lend to them in the first place. But politicians had wanted life to be fair.

As more houses were foreclosed the flood of homes started lowering home values. People with high incomes found that they could not afford the “innovative” mortgages on their bigger and better homes. Uh-oh. More people lost their homes. The banks and investors couldn’t sell the homes they foreclosed. Banks and investors started going bankrupt and that brought us the economic crisis which faces the entire world right now.

There are roughly 220 million people in the United States that actually pay income taxes. The United States government has authorized spending of 700 billion dollars so far to fix the current economic crisis. By my feeble calculations that means that every U.S. taxpayer  is now on the hook for about $32,000 because politicians wanted life to be fair.

The funny thing is that in 1970 you could buy a really nice house for $32,000. It would have been cheaper if the United States government had just bought a nice house for every family that didn’t  have one.

Which brings me back to my original point. Life is not fair. It just isn’t.

We understand that. Why don’t politicians?