Welcome to the June Business “Boomers” issue of NorthBay biz magazine. In addition to all our regular features and columns, this month’s issue also includes a special focus on senior health. Throughout the year, in every monthly and bonus issue, NorthBay biz’s mission is to provide coverage, analysis and insights on the topics that matter most to the business community in the North Bay.
This issue marks the 12-year anniversary of our acquisition of the magazine in June 2000. And if we’re to believe the feedback we receive from our readers and advertisers, we’ve managed to do an excellent job of publishing a magazine that resonates with their needs. I’d like to thank you on behalf of my partners, Joni and John, for all the support you’ve given the magazine over the past 12 years. We continue working to improve the publication and reaffirm our commitment to delivering information that serves your best interests and the best interests of business in the North Bay.
“Since this is an era when many people are concerned about ‘fairness’ and ‘social justice,’ what is your ‘fair share’ of what someone else has worked for?”—Thomas Sowell
A quick aside: Thomas Sowell rocks. He grew up in Harlem. He’s a former Marine and Korean War veteran. He graduated from Harvard magna cum laude and received his master’s in economics from Columbia University and a doctorate in economics from the University of Chicago. He began his writing career as a newspaper columnist in 1984. Currently, he’s a senior fellow at the Hoover Institution at Stanford University. His keen insight into the economy is matched by his uncanny ability to cut through political dogma to the core issues hidden beneath the rhetoric. In short, I envy his intellect.
You can put it in the book. It’s official. As of February 9, 2012, the national debt of $15.6 trillion surpassed 100 percent of the country’s $15.4 trillion Gross Domestic Product (GDP). Undeterred by this massive debt, government spending continues unabated. Politicians love to cast themselves as the people’s benefactors—riding to the financial rescue of the next self-identified group of victims and vilifying sometimes mythical oppressors while trying to buy votes in the process. Class warfare works best that way. In reality, however, government doesn’t have dollar one to spend unless it first takes it from us or borrows it and adds it to our debt.
The federal government forecasts it will collect almost $2.6 trillion in taxes this year with state and local governments collecting an additional $1.35 trillion. That’s just less than $4 trillion total, and it represents 25 percent of the total GDP. If you’re thinking, “wow, collecting taxes—finally one thing the government is good at,” you’d be only partially correct. It’s really good at something else too—borrowing. You see, almost $4 trillion in annual tax money doesn’t really go that far these days. It absolutely, positively, unequivocally, must be supplemented with another $2 trillion in borrowed funds. Why— because spending will be at $6.1 trillion this year. You really can’t expect the government to subsidize entire (failing) industries on a measly $4 trillion, can you? And once they’re bankrupt it’s hard to recover the loan. So what if that means overall government expenditures this year will approach 40 percent of GDP. If things really do get serious at some point, they can always raise taxes. I think I heard somewhere that doing so is, “only fair.”
“Weighing benefits against costs is the way most people make decisions—and the way most businesses make decisions if they want to stay in business. Only in government is any benefit, however small, considered to be worth any cost, however large.” —Thomas Sowell
Since I seem to be hooked on quotes in this column, I think I’ll leave you with a few more gleaned from a recent article written by John Hawkins titled, “20 Only in America Ironies.” Space constraints mean you’ll only see a selected sampling of his 20 ironies, but you should seek out the others as well. I hope you enjoy them as much as I did.
“Only in America could the people who believe in balancing the budget and sticking by the country’s Constitution be thought of as extremists.”
“Only in America could politicians talk about the greed of the rich at a $35,000 per plate campaign fund-raising event.”
“Only in America could you need to present a driver’s license to cash a check or buy alcohol, but not to vote.”
“Only in America could the government collect more tax dollars from the people than any nation ever has before in all of recorded history and still complain it doesn’t have nearly enough money.
“Only in America could the rich, who pay 86 percent of all income taxes, be accused of not paying their ‘fair share’ by people who don’t pay any income taxes at all.”
That’s it for now. Enjoy this month’s magazine.
