Monday, February 02, 2009

Capital Gains

Some of my conspecifics at lunch were touting a capital gains tax cut or elimination as a good way to stimulate the economy. Folks who weren't selling their capital assets would be motivated to do so. Who would buy them and with what money was not part of the equation, nor was how encouraging the sale of assets, most depreciated significantly and not subject to tax on a sale, would help the faltering economy. That''s because it wouldn't. It's just a scheme to get more tax benefits for the better off at the expense of the wage earner.

The bailouts, what with their being spent on bonuses and junkets, aren't necessarily leading to the flow of credit, but they are least convincing people that rich people are not morally superior while the idea of supply side economics is based on the erroneous assumption that they are. Put money in the hands of those wealth builders and job creators, not those stupid consumers, and you'll see the economy take off in the right direction, so the supply side mantra goes. In truth, consumers are the real wealth builders and job creators, so you've got to get money into their hands. Consumption is the engine of the economy.

Tee way the arrogant bankers and financiers are going, I'm thinking of investing in guillotine manufacturers.

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