Friday, July 15, 2011

I like taxes.

Fareed Zakaria     W. W. Norton & Co.
 I like taxes.  I like what they can do.  I like my government and I want it to provide education and help for those who need it.  I want my government to spend that tax money wisely for the benefit of everyone.

Listening to the President this morning reminds me of an interview I heard recently with Fareed Zakaria.  He (Zakaria) seemed to have a good, balanced view of this country's place in the world and the economy.  The most important thing I heard him saying was how the people of this country have been led to believe that we should despise the government and not pay more taxes.  This has resulted in the United States now having one of the lowest tax rates of all developed countries in the world.  I don't think this is a good thing and, as Fareed Zakaria points out, it is putting us further behind in education , economic growth and our future well-being.

Here is a sample from the interview and a link to listen to the interview online:

On the U.S. economy

"We have the leading companies and the leading sectors in the advanced industrial world, we have an incredibly dynamic society, and we have high levels of entrepreneurship. And we have the best universities in the world. ... We also have impeccable credit. What we don't have is a political system that can take the simple measures to deal with our short-term deficit."

On what might happen if the U.S. defaults on debt

"I tend to think it will be catastrophic. I think, more importantly, there is a high enough risk here that this is surely a game we don't want to play. ... There are events that economics call low-probability, high-impact events that you don't want to test. You don't want to see if this is one of those things that is an unlikely situation but once it happens could have a huge seismic global effect, because then the cost of dealing with the after-effects is just cataclysmic."

On the government's role in innovation

"We have this debate in America that is almost a theoretical debate about the role of government in the economy and whether government should be involved, and I worry that while we're having this theoretical debate, on the other side of the world, the Chinese government is vigorously promoting industry after industry, the German government is vigorously promoting its manufacturing center, the South Korean government is vigorously promoting its manufacturing sector — and by the time we've resolved our debate, there won't be any industries left to compete in. It is absolutely clear that government plays a key role, as a catalyst, in promoting long-run growth."

On Germany

"Germany is a fascinating role model. The Germans have maintained their manufacturing edge despite being a high-tax, high-regulation economy. Why? Because the government really set about ensuring that it maintained funding for technical training, technical advancements and programs. It made a concerted effort to retain high-end, complex manufacturing — the kind of BMW model, if you will. And they've done that so successfully that Germany, which has a quarter of America's population, exports more than America does."

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