Monday, March 5, 2012

Chapter 5

Well, he started off discussing arms races but quickly went back to some of his favorite metaphors. It's obviously true that spending the majority of a countries resources on destructive forces that would only be needed in the most dire of circumstances takes away from other worthy institutions, but it has always been the case that the country with the biggest Army/Naval force has the power to take what they want. Any country that would be a true threat isn't just going to willingly show their hand honestly. It would be wonderful if a countrie was measured in the quality of the education or healthcare, but pouring all resources into those areas could leave a hole in other areas, like defense and leave a country vulnerable.
I liked his comparison to George Steinbrenner and the Yankees. It's certainly true that without some sort of a "cap" being enforced, those who have the most money or power will end up with the best resources that can be attained. But, even though there is no salary cap in baseball, they are all playing by the same rules, and this is just part of the game. In the case of arms races, limits can be set, but what can really enforce this? Isn't that silly anyways? A country with fewer weapons of mass destruction, still has weapons of mass destruction. And by making it a priority to have them shows that the country is willing to use them under the proper circumstances, but all parties are suppose to trust that the proper circumstance will never arise? If some countries freely allow inspections for WMD's while others refuse, then they are clearly not playing by the same rules, which breeds distrust, paranoia, and the urge to 'be prepared' to deal with them when the time comes.

I'm not sure if I fully understood his general tax idea, he said that people should pay taxes on the difference between what they make and what they save? Meaning that the more you save, the less you spend on taxes? I'll just have to assume that would apply to a higher than average income bracket. I don't think very many people are in a position to save a substantial amount of money, and if they are either being forced to save money, or pay that money in taxes, when does it get spent in the market? Please correct me if I missed some key element, but it just sounds like a terrible idea that would make the poor ever poorer.
And even if it does only apply to very high income individuals, by creating that ultimatum to either save or be taxed, is still keeping that money out of the market. I guess if they are investing that isn't as bad, but owning the big mansion is still using resources and creating jobs, just like the extravagant birthday party. If an individual has the means to pay for these frivolous actions,  then let them! Living in the moment, what could be more Darwinian?

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