http://cafehayek.com/2011/04/money-isnt-wealth.html

Money Isn’t Wealth
by DON BOUDREAUX on APRIL 20, 2011
in MYTHS AND FALLACIES,SEEN AND UNSEEN,TAXES

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Steve Landsburg – in his armchair or out of it – is brilliant, just brilliant. This post of Steve’s is a must-read.

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http://www.thebigquestions.com/2011/04/18/the-man-who-cant-be-taxed/

The Man Who Can’t Be Taxed
Published by Steve Landsburg on April 18, 2011
in Bad Reasoning, Current Events and Economics. 64 Comments

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Nothing makes my job easier than a journalist who writes about something interesting and gets it 100% wrong.

Thanks, then, to Elizabeth Lesly Stevens for her column in yesterday’s Bay Citizen. Stevens wants to tax the “idle rich”, her Exhibit A being Robert Kendrick, heir to the $84 million Schlage Lock Company fortune. According to Ms. Stevens, Mr. Kendrick appears to do pretty much nothing but park and re-park his four cars all day long. Taxing people like Mr. Kendrick, she says, has to be part of any solution to America’s fiscal crisis.

Here’s what Ms. Stevens misses: Assuming the facts are as she states them, it is quite literally impossible to raise revenue by taxing the likes of Mr. Kendrick. We could argue about whether it’s desirable, but because it’s impossible, the discussion is moot.

Here’s why it’s impossible: For the government to consume more goods and services, somebody else must consume fewer.

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Everyone has to go back to poor old Robinson Crusoe’s island where some kind of money is created — be it pretty seashells or giant totem poles.

Let’s assume for the sake of argument it’s Confederate States of America dollar — one fiat currency is as good as another. An let’s further assume that the price level has become stable over time, one CSA dollar trade for one fish. AND Ms. Stevens, who’s economic education is sorely lacking, steals all the CSA dollars. For her to consume more fish, someone has to consume less. The amount of CSA dollars she’s stolen is irrelevant.

Economics is the “dismal science” because it can’t make more fish. It does tell us that when any good is limited, that is fish, there are several ways the fish can be divided. Argh! The free market will, if allowed, “fairly” allocate that poor fish, but the money used to vote on it ain’t the fish.

Argh!

It’s so simple and yet so hard for liberals and some conservatives to grasp.

Money has real world consequences. Gooferment is the problem. And, politicians and bureaucrats are today’s high priests. At least, in the Aztec days, they had human sacrifice. But, I’ll be they didn’t use the politicians and bureaucrats!

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