Geeks of the world, unite! You know more about the functions of our nation’s economy than the regime that has been elected. This is due in large part to the fact that most every geek worth his or her weight in Space Bucks has played the game “SimCity”®. Just a basic knowledge of how this game works will give you more insight into tax policy and government budgets than Pelosi, Reid, Obama, and all of the other looney-left liberals in the Obama regime.
The game begins with you as the mayor, and you must determine how best to zone your new city, provide water and other utilities, grow business, and build the economy. You have complete control of the tax rates for personal, industrial and commercial revenue streams. You also manage the budget expenditures for every service including education, police, fire, and many others. To be successful, you must grow your city, build your economy, and balance your budget or, if you're very good, create a surplus. This is a somewhat simplified view of government economics but the principles and concepts are the same. There is significant evidence of this at the national and international levels.
Some basic scenarios. As your city grows, demand for services increases. These services require funding, and most novice players reach into the tax bucket and begin increasing tax levels, usually commercial and industrial. As levels rise, guess what happens. Companies in the commercial and industrial zones begin to close up shop and move out of the city. Sound familiar? It should. Look back ten years and compare tax rates and US manufacturing jobs to today’s levels. You’ll note more manufacturing jobs and lower tax rates before year 2000 than you have today. Industry is moving out of the US to countries with lower tax rates, just like in the game.
Know what else happens? Tax revenues go DOWN, and deficits RISE. Spending continues as more and more services are added. Increased spending, reduced tax revenues, and you have a deficit. If you increase spending without increasing revenue (Obama’s latest plan), you get a bigger deficit. Keep in mind this game is played by children all around the world, that it has been available in various versions since the 1990’s, and it is the basis for many other “Sim” games.
Want some real world examples of these facts? Try Greece. Continued increases in spending and reductions in tax revenues have resulted in a near default of the entire country. Portugal is already broke and getting worse. Recent reports indicate Italy is next.
Locally, say hello to Detroit, a haven of liberal ideology. The city has eroded and is a mere shadow of its former greatness. Continued increases in taxes and exploding spending for union retirement packages have resulted in the collapse of the city. This despite the best effort by Jeff Daniels and other Hollywood hotshots that have participated in ad campaigns to bring business back to Michigan. Increased taxes on industry drove industry out of the city and out of the state, just like Minnesota, just like California, just like New York city, and just like “SimCity”®. Increased taxes resulted in reduced tax revenue. Spending in those cities and states stayed flat or increased. Now you have deficits so big those cities and states are shut down or in dire straights.
Want to see the reverse? Lower tax rates, cut spending. If you do that in the game, your budget goes from deficit to surplus. Some people will complain initially but as more money flows into the treasury you can allocate more funds to needed services. Your deficit disappears because tax revenues increase due to the decrease in tax rates. Industry and business returns to your city and becomes part of you tax base. Congratulations, you are on your way to winning the game.
Real world example? New Jersey. Wisconsin. North Dakota. The list is getting bigger. More and more states are electing Conservative leaders who are doing just what children do in the game. By reducing spending and cutting taxes, businesses are returning to the states and state tax revenues are increasing.
So if children playing a game get this, what’s up with Barry and the bunch in DC? There are only two possible answers to this question. Either Barry and the bunch are too stupid to grasp the concepts in a child’s video game, concepts that are echoed around the world and in their own back yard, or they have another motive for ignoring these concepts. Neither of these possible answers should give us any comfort.
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