From: slagle@lmsc.lockheed.com (Mark Slagle)
Subject: Re: [misc.activism.progressive] Clinton Office Requests Comments
Reply-To: slagle@lmsc.lockheed.com
In-reply-to: Cliff Chaput's message of Fri, 8 Jan 1993 19:57:14 GMT
Organization: You wouldn't ask this if you'd seen my desk.
	<1993Jan6.105924.28062@cbnewse.cb.att.com> <11376@prijat.cs.uofs.edu>
	<1993Jan8.195714.29883@ils.nwu.edu>
Date: 9 Jan 93 00:09:08

In article <1993Jan8.195714.29883@ils.nwu.edu>, Cliff Chaput <chaput@ils.nwu.edu> writes:

> You're forgetting something, though: supply and demand.  If taxes were
> eliminated, and the average net income rose accordingly, demand for all
> items would also rise, since they are now more affordable.  As the demand
> rises for a product, so will its price.

You're forgetting something, though:  That under the present
system the taxes collected by the governments are not stuffed
into a mattress or otherwise taken out of circulation.  The money
is either spent directly on goods and services or redistributed
to other citizens to be spent.  The aggregate demand is unchanged
by taxation.  The only difference is in the particular items
thereby demanded.

> In a post-tax-elimination world, products will cost the same as
> they do today, as a percentage of income.

Right, as a percentage of gross income.

> The difference would be that the government (the people) will no longer
> have the power to subsidize those areas whose importance to society
> transcend their free-market viability, like research (medical,
> technological, etc.), education, transportation, law enforcement,
> national defense, etc.

Quite so.  And this is where your hard won knowledge of supply
and demand can be put to profitable use.  When the government
subsidizes any particular category of goods, the price of those
goods is artificially inflated by the stimulated demand for them.

The deleterious effects of such a policy can easily be seen, for
example, in the soaring costs of medical care.  Until the
government got into the business of subsidizing health care with
the Medicare and Medicaid programs, the cost of health care did a
credible job of representing the general rise in prices, i.e.
they tracked inflation.  Since these programs were installed, the
price of medical care has increased to such an extent that the
busybodies in Washington have been able to convince the large
part of the population that they need more of the same kind of
government interference, rather than less.  Simple supply and
demand.  The government bumps the demand and the supply,
artificially limited by government credential restrictions
demanded by the medical lobby, skyrockets in price to a level
where people can no longer afford it unless the government picks
up the tab.  Marvelous.  Perfectly predictable, but marvelous
nonetheless.

> Instead of these things being distributed to the
> masses, they will go to the highest bidder, and will therefore be
> designed to benefit those who can pay for it.

Radical concept that products should be designed to benefit those
who are willing to pay for them, rather than some idiot bureaucrat
who presumes to know what people need and want.  Too bad there's no
shortage in the supply of such arrogance.

> As to the point of this thread, whether education should be subsidized, I
> pose the following question: If the poor cannot afford an education, how
> do you expect they can ever pull themselves out of poverty?

Through hard work, thrift, and more hard work.  The same way
that all worthwhile goals are attained.

> These postings which express this "get the government (the people) out of
> the way of the free market" attitude always confuse me.  It almost seems
> that their authors believe that governments exist to support capitalism,
> when it's quite the reverse.

It is the reverse.  Governments exist to squelch capitalism, not
support it.  

Or did you really mean that the purpose of capitalism is to
support governments?  Most legislators would probably agree with
this one, but perhaps you'll forgive me if I quibble with it.

=Mark
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Mark E. Slagle                                 PO Box 61059
slagle@lmsc.lockheed.com                       Sunnyvale, CA   94088
408-756-0895                                   USA