Watching It Burn

When a car quits running it’s most likely either out of gas or low on oil. If it’s low on oil, adding gas won’t help; similarly, if it’s out of gas, adding oil will do little to get it going again.

A WSJ editorial today reads in part: “Oregon raised its income tax on the richest 2% of its residents last year to fix its budget hole, but now the state treasury admits it collected nearly one-third less than the bean counters projected. The sun also rose in the east, and the Cubs didn’t win the World Series.” and, I might add, Oregon’s economy didn’t improve. It takes both oil and gas for a car to run properly.

Taxes have hit the wall in many states. Raising them, has (at best) had no effect on either topping-off state coffers or on improving the economy. We’ve already drained the oil down to dangerous levels; adding gas (stimulus) won’t help.

Gas represents the government’s power to tax. Oil represents the people’s willingness to keep on working and paying taxes. When either one exceeds or falls short of its optimum level, the economy falters.

Anyone who simply advocates - as Democrats do - that increased taxes will kick-start our economy is ignoring the oil-side of the equation. Similarly, anyone who advocates cuts in spending to the exclusion of other factors is on the wrong track. The economy will not improve unless and until the equation balances.

Tea Parties tend to harp on government spending while our government is harping on ‘tax breaks for the rich‘. Neither one will ultimately succeed in bringing the economy back. It doesn’t take a mechanic to diagnose the problem in Oregon. Those who simply say “it’s the economy, stupid” are missing the point. They’re blaming both gas and oil under the umbrella of the economy not working. It takes a more nuanced approach. Clearly there’s more than enough gas. What’s missing is the oil.

Solution: Ease off on the gas and add oil. [Note to Obama: If the plan, however, is to kill the economy outright, simply to watch it burn, there are other (quicker) options. We could always run it into a bridge abutment. All options remain on the table.]

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