Koch Article
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WSJ: Why Koch Industries Is Speaking Out
Years of tremendous overspending by federal, state and local governments have brought us face-to-face with an economic crisis. Federal spending will total at least $3.8 trillion this year—double what it was 10 years ago. And unlike in 2001, when there was a small federal surplus, this year's projected budget deficit is more than $1.6 trillion.
Several trillions more in debt have been accumulated by state and local governments. States are looking at a combined total of more than $130 billion in budget shortfalls this year. Next year, they will be in even worse shape as most so-called stimulus payments end.
For many years, I, my family and our company have contributed to a variety of intellectual and political causes working to solve these problems. Because of our activism, we've been vilified by various groups. Despite this criticism, we're determined to keep contributing and standing up for those politicians, like Wisconsin Gov. Scott Walker, who are taking these challenges seriously.
Both Democrats and Republicans have done a poor job of managing our finances. They've raised debt ceilings, floated bond issues, and delayed tough decisions.
Senior Economics Writer Stephen Moore critiques Washington's pending budget deal.
In spite of looming bankruptcy, President Obama and many in Congress have tiptoed around the issue of overspending by suggesting relatively minor cuts in mostly discretionary items. There have been few serious proposals for necessary cuts in military and entitlement programs, even though these account for about three-fourths of all federal spending.
Yes, some House leaders have suggested cutting spending to 2008 levels. But getting back to a balanced budget would mean a return to at least 2003 spending levels—and would still leave us with the problem of paying off our enormous debts.
Federal data indicate how urgently we need reform: The unfunded liabilities of Social Security, Medicare and Medicaid already exceed $106 trillion. That's well over $300,000 for every man, woman and child in America (and exceeds the combined value of every U.S. bank account, stock certificate, building and piece of personal or public property).
The Congressional Budget Office has warned that the interest on our federal debt is "poised to skyrocket." Even Federal Reserve Chairman Ben Bernanke is sounding alarms. Yet the White House insists that substantial spending cuts would hurt the economy and increase unemployment.
Plenty of compelling examples indicate just the opposite. When Canada recently reduced its federal spending to 11.3% of GDP from 17.5% eight years earlier, the economy rebounded and unemployment dropped. By comparison, our federal spending is 25% of GDP.
Government spending on business only aggravates the problem. Too many businesses have successfully lobbied for special favors and treatment by seeking mandates for their products, subsidies (in the form of cash payments from the government), and regulations or tariffs to keep more efficient competitors at bay.
Crony capitalism is much easier than competing in an open market. But it erodes our overall standard of living and stifles entrepreneurs by rewarding the politically favored rather than those who provide what consumers want.
The purpose of business is to efficiently convert resources into products and services that make people's lives better. Businesses that fail to do so should be allowed to go bankrupt rather than be bailed out.
But what about jobs that are lost when businesses go under? It's important to remember that not all jobs are the same. In business, real jobs profitably produce goods and services that people value more highly than their alternatives. Subsidizing inefficient jobs is costly, wastes resources, and weakens our economy.
Because every other company in a given industry is accepting market-distorting programs, Koch companies have had little option but to do so as well, simply to remain competitive and help sustain our 50,000 U.S.-based jobs. However, even when such policies benefit us, we only support the policies that enhance true economic freedom.
For example, because of government mandates, our refining business is essentially obligated to be in the ethanol business. We believe that ethanol—and every other product in the marketplace—should be required to compete on its own merits, without mandates, subsidies or protective tariffs. Such policies only increase the prices of those products, taxes and the cost of many other goods and services.
Our elected officials would do well to remember that the most prosperous countries are those that allow consumers—not governments—to direct the use of resources. Allowing the government to pick winners and losers hurts almost everyone, especially our poorest citizens.
Recent studies show that the poorest 10% of the population living in countries with the greatest economic freedom have 10 times the per capita income of the poorest citizens in countries with the least economic freedom. In other words, society as a whole benefits from greater economic freedom.
Even though it affects our business, as a matter of principle our company has been outspoken in defense of economic freedom. This country would be much better off if every company would do the same. Instead, we see far too many businesses that paint their tails white and run with the antelope.
I am confident that businesses like ours will hire more people and invest in more equipment when our country's financial future looks more promising. Laying the groundwork for smaller, smarter government, especially at the federal level, is going to be tough. But it is essential for getting us back on the path to long-term prosperity.
My favorite part of this article
Good article. Just finished reading his book - great read.
Nice reference to "crony capitalism" - GE comes to mind.
the Koch brothers are true heroes.
HAHAHAHAHAAH thanks for the laugh wipes away tears
When a business man funds a political campaign ---> Fascism and injustice
When Unions fund Democrats and get pensions, raises and all types of goodies pushed through on the backs of tax payers ----> Helping the middle class
1) Eliminating unions does not mean teachers will be paid crap. Good teachers can demand more. Bad ones will be fired. We need good teachers, there is a demand. This drives price.
2) Do DMV workers need a union? Garbage men? Pay is cheap, what is costly is the pensions.
3) States are broke. Maybe Wisconsin forced things, but nearly all states are in a financial bind. Pensions are expensive. GM and most major companies have found this out.
4) Unions deny rights. If you want to be a teacher, you have to be unionized. If you want to work for the government, you have to have dues taken out. How is this fair, but not allowing government workers the right to unionize not fair?
http://en.wikipedia.org/wiki/Charles_G._Koch
Koch is a libertarian.
I really love all the faux outrage. Unionized workers at the state level are insanely expensive. Tax payers have to pay for this. If you don't like working for the government or you complain about your salary, simply quit and find something else.
Teachers piss and moan about how underpaid they are. Quit! Stop bitching and moaning as if anyone gives a shit and leave your job. Real simple. We all work in a competitive environment. If you love teaching and the kids, stop complaining about your pay. If it is all about the money then stop using kids as your shield. After a while you get sick of hearing about it.
The cartoon in that article depicts small business and does an injustice to ACTUAL small business owners, such as myself. Koch is anything BUT a 'small business owner', and I see no need for a disingenuous appeal. That having been said, I'm glad this guy opened his mouth and got to the point.
Agreed.Good article, but he's preaching to the choir.
Koch is right in aggregate, but I think he's wrong about Wisconsin teachers. Also, he confuses raising the debt ceiling with deficit spending.
Can you be specific about your qualms? Also, not sure about the Wisco situation, but debt ceiling has been raised at the fed level (being discussed for a further raise) so I think it's relevant here.
I would love to hear what monkeysama thinks of this claim.
Great article. Koch has some great points but it looks as though they will go unheard on Capitol Hill
Good article. I'm glad to see them fighting back. The Kochs are turnign into the Obama of the far left as a sort of hate figure.
Well if Koch is bankrolling the tea party, I love him even more!
YEAHH TEA PARTY! YEEEE HAWWWWW!
Main Principles : Low Taxes, Obama is Hitler, Get these Mexicans Out, Jesus is Coming Soon, and No Government Healthcare but Dont Touch my Medicare! (WTF...think for a fucking second you morons)
He's a true hero indeed.
W was Hitler and the Anti-Christ combined when in office. How quickly we forget.
Both Democrats and Republicans will fuck us over. No surprise there.
Yup, lower taxes, being pro-LEGAL immigration, and more freedom. Hallmarks of America and America's party.
God Bless the Tea Party!
Nope.
I wonder what else they're up to....
Great article, thanks for posting.
What does he mean by this:
"Federal data indicate how urgently we need reform: The unfunded liabilities of Social Security, Medicare and Medicaid already exceed $106 trillion."
I'm all for lower taxes, but shouldn't we do something to fix the budget first? The Tea Party, as a supposedly "populist movement" wouldn't dare do anything to social security and Medicare, the two things that actually need to be reformed.
To me, the tea party is just all talk. So what if they just cut $4 billion from the budget? That's a pittance compared to the deficit and the national debt. Honestly, if the Tea Party were truly about freedom they would do something about decriminalizing marijuana and reducing tax expenditures AKA Government spending in general such as those granted to religious institutions.
you guys act like the Tea Party is actually some kind of organized political entity. It's basically just a bunch of all sorts of right-wingers protesting about various things with some overlap... no-one is bankrolling it because it doesn't actually exist, its just a metaphor for rising popularity of various right-wing ideas.
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