Elizabeth Warren's Speech, Part 3

This is an exact copy of the response my nephew made to Ms. Warren's speech. It was my intention to copy exactly his words, his spelling, his punctuation, his capitalization, and his grammar. If I have changed any part of it, it was an accident. I have not placed his response in quotation marks, because he uses quotation marks thoughout in a way that would have made it confusing if I had tried to convert them all to internal and external quotation marks.

I agree 100% that any tax cuts or spending of any kind, wars, tax cuts for anyone (since only the top ~50% pay income taxes, that kind of cuts out tax cuts for the poor, doesn't it?), expansions in government programs, etc MUST be paid for by cuts in spending elsewhere or an increase in taxes. She makes the implication that it is conservatives or republicans that are universally responsible for this; this is blantantly untrue and is common knowledge to anyone who has followed politics for the past 20 years.

"Her declaration that the 'medicare drug benefit is 40% more expensive than it needs to be and was a giveaway to the drug companies' is questionable at best. I know of nothing to prove her assertions. I have yet to see a government program that was not a 'giveaway' in some respect. However, to use Rep. Pelosi's logic: For every dollar a person receives in food stamps, Pelosi said that $1.79 is put back into the economy (http://politicalticker.blogs.cnn.com/2010/10/06/pelosi-fires-back-at-gingrich-over-food-stamps/); surely food stamps correlates to medicare.

Of course, by this logic, all spending should be controlled 100% by the government; then we would have an economy of perpetual motion!

On to the second segment...

Her declaration that the 'rich' owe those who are not rich because they use public services such as transportation or education is disingenuous at best. I will try to address each of her examples in turn.

"Nobody got rich on his own"

A rather empty statement. This means nothing.

"You built a factory out there, good for you..."

Simplifying a terribly complex and risky process. For a company to build a factory, unless the company is afloat with surplus liquid capital, that company will need to get a loan and pay the interest. The company hires another company to build the factory, then finds new workers to staff the built factory, buys the equipment and raw materials (usually another loan) and must spend more money to market the product.

"...you moved your goods to market on the roads that we paid for..."

A misleading statement at best. To understand why this statement (and the statements following) are misguided, you must understand that in the modern market of competitive commerce, the company as an entity is almost always different than the owner or CEO as an entity. Unless this woman is describing the shareholders of that company as 'you' in this phrase, I am not sure who exactly she means.

If she means the company as an entity, then yes, she is correct. The company (that amalgamation of workers, managers, and stockholders) is using the public roads to move goods. Every one of those people that depend upon that company as a means of income depend upon that road. That company (through the progressive income tax system) is already paying for those roads through the personal income taxes of its people (those that fall into the top 50%. The bottom 50% pay nothing but sales tax, which will not necessarily go to the infrastructure). Furthermore, the customers that the company serves (I assume this is who she means by 'we', but 'we' could really mean anyone, as she does not define the term) rely on those goods and buy them. They pay the same taxes to fund the roads as those who make the goods.

"...you hired workers the rest of us paid to educate..."

I missed 'the rest of us' in the last phrase, so I will address it here.

The congresswoman seems to be under either one or both of the following incorrect impressions:

The company entity is not paying taxes to support public education

The company is not an entity unto itself, and is instead the combined servitude of many people for one person, the owner. This owner pays no taxes.

Since the company in her fictional scenario is the proud owner of a factory, it must pay property tax. When it pays for shipping, it pays the gas tax. When it pays the personnel that work inside of it, those personnel pay income tax or payroll tax or both. Those who make more money within the company pay more income tax, unless they donate money, or qualify for another tax deduction.

She also implies that the workers themselves received no personal benefit from the education; as if the education was purely for the benefit of the company. Poppycock.

If she means the primary stockholder of the company, or 'owner' ('owners' if it is a publicly traded company) as I have been using, then she fundamentally does not grasp the concept of an LLC or any corporation in general. Sadly, this lack of comprehension seems to be an epidemic. Perhaps she needs to have 'them' pay for a better education system.

"...you were safe in your factory because of police forces and fire forces that the rest of us paid for..."

Again, whether she means the company as an entity of people (read: taxpayers) or is addressing the primary stockholders, she is ignoring key facts. I will ignore the assertion that she appears to make that the primary stockholders live in their factory. What is this, kindergarten? Someone forgot to tell this congresswoman that teachers and stockholders don't live at school. ;)

The police and fire forces which keep said factory safe are often as not paid for by the same municipal property taxes that are pulled from the company for having its factory in the city. If the factory is outside the city limits, it is most likely outside of the city's fire coverage. I would tell miss Warren that she should start a campaign to get her fictional factory annexed by the city and start collecting municipal property taxes. ;)

In any case, the assumption that miss Warren is making in each statement seems to be the same: there is no company, only a person at the top. There is no unity of purpose in the company, there is only the person(s) at the top, and 'the rest of us'. And according to her, 'the rest of us' are paying for everything, and this secret cabal of people at the top are using it and not paying for it, and when they use it, it benefits 'the rest of us' not at all.

Tell me how this is not class warfare.

And I don't remember signing a 'social contract' either.