by Charles Hugh Smith
Of Two Minds
Rather than right the ship, the “easy fix” is to distribute “free money”–not just to billionaires and corporations but to everyone.
The system of collecting taxes and distributing the dough is a zero-sum game: each dollar of tax revenue paid by someone and given to someone else is one dollar that the taxpayer will no longer have to save or spend. Meanwhile, the recipient received a dollar that would not have been available without taxes.
State and local governments are still bound by this zero-sum game except for infrastructure spending funded by the sale of municipal bonds. These bonds are debt and must be paid back with interest. But as a general rule, the general funds of cities, counties and states are zero-sum: they can only spend what they collect in tax receipts.
As a result, the feeding frenzy at the public trough has winners and losers: taxpayers who receive fewer benefits than they pay in taxes are the losers, and residents / enterprises who get subsidies, tax breaks, entitlements, benefits in excess of what they paid in taxes are the winners.