Capitalism needs Capital

Let us accept the premise that Bush’s tax cuts were only for the rich –-even though we all know that when tax rates are reduced ALL who pay taxes pay at a lower rate. The argument goes; if we continue Bush’s Tax Cuts, the rich will not spend it but save it.

The real question then is; “are we Capitalist or Socialist?” The word Capitalism is a derivative of Capital. Capitalism needs Capital to succeed. Socialism on the other hand needs Government taking money from individuals and distributing to those they favor. Capitalism requires the availability of savings.

If the rich who already have basic necessity–which is why they are rich–use the additional money that they receive through tax cuts to save it, that is a good thing. Do Liberals know how the Banking System works? For all their bickering over economics, one would think they would spend less time studying political science and more time studying economics.

The monies that we place in the banks are used to make loans to business-women and men. That is how Capitalism works. It requires Capital. It requires people making more money than they need and saving the rest. It also requires people who spend. However, at this juncture in our economy, small business need money to borrow as the president argues. If the banks do not have excess money to lend because savers had Uncle Sam takes it from them, then what will they issue to those who are applying?

The obvious belief among liberals is that the only people who save are the rich. If that is the case, then we need more tax cuts for the rich because it is the only way small business-women and men can get the capital they need.

If that money goes to the government instead of the banks; then those who favor that approach prefer Socialism to Capitalism. They are saying that top-down command and control is the best policy. They are central-planners and nothing else. We believe in capitalism not socialism.

With Capitalism, people are given the opportunity to fail or to succeed. If they succeed, they reap the rewards. If they fail, they go out of business. In socialism, businesses fail or succeed based on what politician they know or whether their employees are likely to vote for certain politicians.

As you can see; if we accept the premise that Tax cuts for the rich results in savings, then that is exactly what Capitalism needs. If you doubt me; check out the savings rate of the Chinese and then will you begin to understand why they finance so much of America’s debt. Capitalism cannot succeed without capital. Therefore, we must recognize that liberals attempt to raise Taxes is an attempt suck this country and the business-women and men dry of capital. That result in the Government being the only place to go to if people have a business and want to grow.