Essential Economics for Politicians

Why am I not worried that some group of people or the entire world are "moving towards socialism"?

Because I have eyes.

Everywhere I look — every state, country, city, or region in every culture and tongue — everywhere I have ever been or heard about consists of people who daily reveal their love for markets. People the world over love free trade and the fruits thereof. They seek it. They find it even when governments try to stamp it out. It cannot die.

People love to create, exchange, produce, consume, innovate, improve, and seek material and spiritual progress, happiness, and comfort. The remotest place on earth, if humans live there, will have shops and markets and trading of some kind.

Everywhere capitalism has an ounce of oxygen or an inch of space, it explodes with a force untouchable by any do-gooder scheme of violence and control.

Show me a protester, and I will show you his closet full of the fruits of capitalism. Show me an advocate of redistributionism, and I’ll show you her interest-yielding accounts. Show me an unruly mob, and I’ll show you a group of consumers and producers who jump at every chance to engage in peaceful, self-interested trade.--I. Morehouse
 
The Laffer Curve: It's Time to Stop Laughing
The new tax plan has shown that Arthur Laffer’s analysis was correct.

laffercurvegraph.png
 
The Laffer Curve shows the direct correlation between tax rates and tax revenue. The graph suggests that there is a certain tax rate the government should impose. To better understand the graph, you have to understand where placing the tax rate at either end of the X-axis would mean. If the government imposed a tax rate of 0 percent, the government would not collect any revenue. If the government imposed a tax rate of 100 percent, individuals would no longer work and businesses would no longer produce goods as there would be no incentive to do so.
 
https://www.fiscal.treasury.gov/fsreports/rpt/mthTreasStmt/mts0118.pdf

The intended effect of cutting taxes is to accelerate economic growth. An unintended consequence of cutting taxes is raising government revenue. The January 2018 Monthly Treasury Statement showed that the U.S. Department of Treasury received $361 billion in tax revenue. In January 2018, the Treasury received $212 billion in individual income taxes, $113 billion in payroll taxes, $13 billion in corporate income taxes, and $23 billion in other taxes. For January, it was the most tax revenue collected in American history.
 
Furthermore, taxes received in the first four months of fiscal year 2018 (FY18) are also the most in American history. Thus far, tax revenue for FY18 has come from $603 billion in individual taxes, $372 billion in payroll taxes, $76 billion in corporate taxes, and $81 billion in other taxes.
 
President Trump's Predecessors Learned about Steel Tariffs the Hard Way
The costs of protectionism always outweigh the benefits.
M. Perry

stock_market_gm_boeing_ford_steel.png
 
The chart above displays a comparison of market returns today. The overall market, measured by the S&P 500, was down by 36 points and by 1.3% today; while the shares of steel-using companies like GM, Ford, and Boeing all fell more than twice that amount, or between 3-4%.

In contrast, US Steel shares soared by nearly 5.8%, which boosted the steelmaker’s market cap value by almost half a billion dollars. The costs of protectionism always outweigh the benefits, and the jobs lost always outweigh the jobs saved, and perhaps that net loss of economic value is also reflected in stock market values — the losses in market value suffered broadly by steel-using industries always outweigh the concentrated gains to the firms in the protected industry.
 
Bruddah IZ said:
The chart above displays a comparison of market returns today. The overall market, measured by the S&P 500, was down by 36 points and by 1.3% today; while the shares of steel-using companies like GM, Ford, and Boeing all fell more than twice that amount, or between 3-4%.

In contrast, US Steel shares soared by nearly 5.8%, which boosted the steelmaker’s market cap value by almost half a billion dollars. The costs of protectionism always outweigh the benefits, and the jobs lost always outweigh the jobs saved, and perhaps that net loss of economic value is also reflected in stock market values — the losses in market value suffered broadly by steel-using industries always outweigh the concentrated gains to the firms in the protected industry.
Click to expand...
Guess what states the newly protected industries are in? Trump is thinking about the electoral college.
 
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