July 25, 2015

Randy Schultz

The Sun Sentinel

500 E. Broward Blvd.

Ft. Lauderdale, FL 33394

RE: The not yet here Summer of Recovery and why it ain’t coming – Some comments on your unlinkable op-ed in today’s Sun Sentinel

Mr. Schultz,

Modern American Liberals aren’t dumb per se. It just helps them get through the day. As the great Reagan used to say, “There’s just so much that they don’t know.” Worse, there is – forgive me, Pandora – a box filled with empirically generated data. It sits out there, bobbing in the punch bowl, like an unwelcome turd.

You speak of Clinton’s “four surpluses” as if there were, you know what I’m saying, “four surpluses”.

Government budgets have no capital expenditure items as opposed to expense items. 

An example would be my experience with the Broward Board of Education budget.

In 1998 I went to Board HQ to get some budget information. The charming “flack catcher” gave me a pie chart with expenditures expressed in percentages. When I asked her for a print out of the capital items and the expense items she looked at me as if weevils were eating my nose from the inside.

I explained, gently, ever so gently, that the big shiny metal box in the kitchen, AKA the refrigerator, is a capital item because its use life is more than 3 years. The containers of milk – fat free, of course –in the big shiny metal box are expense items.

If you don’t make the distinction you have an accountant’s version of chaos.

Writ large on a Federal level the moneys spent on an aircraft carrier are treated the same as moneys spent on Midnight Basketball. They aren’t. Thus we have naifish modern American Liberals talking of “surpluses” as if they were real. Like the unreachable horizon or the bush that gives 4 seasons of balloon juice or rainbow stew it exists only in the minds of people who believe that human nature can be changed if enough good people believe it can be changed.

If we had “surpluses” why was there no reduction in the total indebtedness of the United States? Not a dollar. Not a dime. Not a penny. Look it up.

There is no record in History, nowhere, no place, of any country taxing itself to prosperity. If you know of one please show me.

If raising taxes is the preferred modern American Liberal way to prosperity would not Logic dictate that raising interest rates would jump start the economy? A $30 an hour minimum wage would lead us to the land of milk and honey, no?

[Permit me to dash another long held mAL myth. Corporations don’t pay taxes. They never have and they never will. Alas but the card carrying members of the school of “I won’t tax thee if you don’t tax me. Let’s tax that fellow behind the tree” don’t know that the rules governing gravity can neither be suspended nor can they be repealed. Taxes are an expense item. They are the same as salaries, insurance premiums, pension payments, raw materials, donations to the rescue squad or Planned Parenthood, 3 martini lunches, and legal fees. 

They become part of the cost basis of whatever product or service the corporation produces. The customer pays them. Look that one up.]

You say, in a somewhat smarmy ex cathedra style, that “only 28% of the $4 trillion dollar economy is discretionary spending”. Au contraire. 

When the Tribune Corporation, the parent company of the Sun Sentinel, went into bankruptcy I guarantee you that 100% of the expenditures became “discretionary”. As such, they were subject to a black robed executioner’s ax.

I recommend that the broadsides fired by President Zeus once he gets to the top of Mount Washington include such tasty targets as the Department of commerce, the Department of Energy, and the Department of Education. Executive orders ending the subsidies to Amtrak and the Post Office will have been issued coincident to the inaugural. They would go into effect just after the words “I do” were heard.

Lord Keynes, a man more quoted than read, was a proponent of cutting taxes so as to release the “animal spirits” of business. It’s what makes the dog hunt.

Parnell was standing for election in his quite “rotten boro”. He came upon a group of men who were breaking rock. One of them was quite beside himself praising him as the greatest man in the world, as the savior of us all. “Calm yourself”, he said. “Next Monday I will be reelected and next Tuesday you will be breaking rock.

No man, not even a Pope, can change that. 

A system that enables the rock breaker to have other men break rocks for him is the only way to prosperity.

As the legendary Big Mike from Bayonne, the noted sportsman, inn keeper, and now an exemplary public servant still says, “That’s why you never see anybody swimming to Cuba”.

Kevin Smith

PS – Taxing yourself to prosperity is, as Churchill said, “like standing in a bucket and trying to pick yourself up by the handle”.