Thursday, 17 September 2009

Just a reminder ...

In a recent online argument, someone told me, with the conviction only possessed by the truly deluded, that the USA was the home of individualism, capitalism and blah blah blah.

The idea that the USA is a capitalist country is a strange and rather widespread fallacy. It is, in fact, one of the most socialised countries on the planet. The country's economic success is based on its defence industry, which is, obviously, based on government spending - over half of federal spending goes on defence related stuff (1). This supports numerous other industries and provides income for a huge slice of the population.

The big problem the United Soviets of America faces is that the obssession with appearing to be capitalist - translated roughly into English, that means low taxes - means massive debt. As of today, according to the Brillig debt clock (2), the USA's National debt is $11,838,707,176,110.08.

So whereas countries following the European model spend - more or less - the money theytakes in tax (though this is distorted by the 'low tax-high debt' regime in the USA, forcing the European countries to take on more debt and lower taxes somewhat to remain competitive), the USA taxes as little as it praciably can, still beholden to the Lafferite madness that low tax means a higher tax take, and disguises the failure of this absurd proposition by borrowing. This makes the USA a great place to live, of course - more nice shiney things, better living, cheaper this, newer that, but it certainly isn't a capitalist economy. It's vibrancy depends on government spending and debt, which isn't a very good model in the long term.
1 - "Where your Income Tax Money Really Goes," Courtesy of the War Resisters' League, viewed 17th of September, 2009. (http://www.warresisters.org/pages/piechart.htm)
2 - The U.S. National Debt, as of 17 Sep 2009, calculated by Ed Hall. (http://www.brillig.com/debt_clock/)

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