Maastricht Treaty revisions needed?

[--Pete]

Hi,

Pre-tax income is not context-free, and therefore is a very poor indicator of "economic power." It's not the amount you would earn, if only that meddling government didn't take anything away.

Reminds me of another other odd thing people think. While they seem perfectly happy to be earning ten times what they did when they first started working, they become very upset that the prices for everything has gone up by that same ten times.

It's an amount that includes both the expectation of taxation, and the productivity benefits of everything the government provides. Think of how much less people would be able to produce in the absence of roads, of defense, of a functional system of policing and laws. Now add the benefits of free education, health care, and so on. All of that increases productivity, and therefore wages, leading to a much higher level of pre-tax income.

While true, this does take us back to the questions of just what are governmental functions and how inefficient is the government. The idea that, no matter how cheaply you can get something, it's not a bargain if you don't want it, comes into play. I believe that kandrathe has made his position pretty clear. He wants the government to do only the barest minimum. And even that minimum, he wants done at the most local level possible. Roads, water, sewer, gas, electric, education, medical care, etc. can all be sold at a profit, and so he wants to keep the government completely out of them.

There are, however, two aspects that need to be considered. The first is, will it cost me more to have x furnished by the government than it would in a competitive market (and all the assumptions that carries). I think the answer to that is almost always 'yes'. Even if the efficiency of the government and of industry were the same, the government has the additional overhead of collecting, budgeting, and distributing taxes.

The second aspect is, who supplies the safety net (which comes with a whole raft of assumptions also). Who pays for the insurance? Who pays for the education? And many others along these lines. If everybody were intelligent, reasonable, capable, foresighted, in short, Jeffersonian, then each would take care of himself. But that is a fantasy. Combined with the almost total disappearance of the extended family, who takes care of those who didn't take care of themselves --whether through their own fault or not. Or do we (society) let them rot?

And, so, we go around the circle one more time.

--Pete