The Great Escape

I have always taken the position that Estate Taxes should be high in rate, as the spoiled little brats didn’t deserve to spend the money in the first place. Others do not agree with me, especially if they love the little hellions. I expect this Conflict of Interest may always exist, as Everyone awaits the Time where kissing the old man’s butt will actually pay off. I have escaped most of the hassle by leaving neither Wealth or Kids behind. The one Issue in the debate which is not mentioned rests upon the Opportunity Cost of elimination of the Estate taxation. It makes it increasingly hard for people of wealth to spend their money on anything but Health Care and the Kids. Earners have to bear the full Cost of Taxation, while Heirs get a freebie Pass on spending a lot of Cash. The Saving ratio can be ignored by the Heirs as their Progenitors had already achieved this function. The Heirs get the Money without Skill or Risk, and waste it to their Heart’s delight. The Set-up is acceptable to the Originators of the Wealth basically only because they are too old and tired to expend any energy on Spending what they have earned. We are used to getting by on nothing!

How did We get to the current economic incoherence? Dani Rodrik may have an idea about How We got here, of course, there also exists an alternative View. Special Interests provide all the political funding, and the reason they spend is to counter social views which they find obnoxious. One can never determine what will prevail in advance, but the greed of Politicians is a powerful Incentive. I have never accepted the thesis that Politicians turned down increase of their campaign funds based upon ideological rationale, thinking that only political fear of public reaction spurred any rejection; I have not heard one Politician so far, who has proposed returning any Bernie Madoff or AIG contributions to their political nest. Still, I could be Wrong, and We have a truly dedicated group in D.C.

I find more Economists who find the current economic lead-in and events prior to the Great Depression possess a disturbing similarity. The only difference in truth comes in the degree of magnitude; if We had the rate of Unemployment as was present in the 1930s, We would still employ many more than they did in the 1920s. This could mean a much higher level of Stabilization than in the Great Depression, or it could mean only a magnification of the levels of Starvation. Just hope that We do not acquire the same level of agricultural decline as endured in the 1930s; a series of events which would put the ‘starve’ in the context. We have at least avoided Stock Traders jumping out of windows at the Stock Exchange; you can’t get good Help these Days. One does not know what the future will bring, but you can be sure that the criminal elements are searching hard for their next Cash Cow. lgl