Re: how to compare living standards


"Jim Blair" <jeb@xxxxxxxx> wrote

How would the FICA's "lost money" be made up?
The same way the money "lost" to the treasury
because of the IRS IRA deduction is "made up".
Namely: unspecified ;-)


Arthur Laffer would no doubt deny that any revenue is _ever_ lost to the
treasury, since of course _any_ tax reduction _always_ grows the economy.
Among us grown-ups, however, there's nothing "unspecified" here.

Lost_revenue = Reduced_spending + Increased_borrowing.

The equation still holds even when a Bush, or a Reagan before him, makes
Reduced_spending a negative quantity.

As a nation, we do not save enough, period. Shifting some of our saving out
of the "Social Security Trust Fund" and into "IRA"s does nothing to
ameliorate that problem.

To save more we need to spend less. That means, for instance, buying fewer
Chinese goods and instead investing in the Chinese factories that make those
goods. See the problem?

-- TP



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