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How is Your Piece of Economic Pie Doing ?

Updated: Feb 12, 2023

Let all the products and services produced in the United States , the Gross Domestic Product (GDP) - supply and demand, be represented as one large pie worth a total value equal to the sales price of every product and service bought and sold in our Free Market. You are an average person in the USA who works and purchases goods and services in a given year, let your share of the GDP pie be represented as a slice of this pie. The worth/value of your pie slice is the income that you have earned minus the taxes you pay yielding the buying power you are left with. You get to spend, save and give away to charity your delicious piece of pie. Whats that? You say you want a larger piece of pie, you are still hungry! Welcome to America, the USA.

Forces that are Shrinking Your Slice of the Pie

Government spending can shrink your pie slice in 2 major ways, tax->spend and inflation. The USA was a free democratic society with a strong Free Market. Since 2000 our Free Market has been increasingly burdened and diminished by Big Government Spending . The following will discuss the bloat of government taxing, borrowing and spending. The result is an catastrophic unsustainable rise in Government spending.

Taxing Businesses

Increasing business tax puts financial stress on businesses leading to expense cutting which at least means less hiring and increased risk of job cutting; this puts your piece of pie at risk, at least shrinkage or even elimination. Furthermore, the great entrepreneurial small business startup engine embedded in a healthy strong Free Market is discouraged by making failure a much more likely outcome. Tax is certain to retard the supply side, demand side, investment, innovation and productivity (growth) which leads to enhancing the other possibilities, shrinking of your pie slice and maybe sparking inflation thus shrinking it more.

Taxing You

Taxing You is a direct shrinkage of your slice of the pie. Of course, depending on how big your slice presently is you may be directly effected less or not at. However, inflation hurts everyone and the poor even more than the wealthy. No matter how big your slice is the tax money the government takes is spent far less efficiently than you deciding where and who to spend your money on.

Social Spending

Whenever government takes from the whole pie, taxing and borrowing, and pays for services for US such as administering our constitutional democracy, defending our country, providing police protection and enforcing our laws, educating our children and building and maintaining infrastructure, this is Socialism that We The People need and justifiably pay for. As you can see the Government's slice of pie is Big, but necessary. However, There is MUCH more!

Government Transfer Payments happen when government distributes money, Socialism, where no value is exchanged in return,Welfare. So when you work, the government taxes and takes your money, the government then distributes your money to other people who offer nothing in return, Redistribution of Wealth. Last year, 2022, the estimated US Government Welfare distribution was $1.3 Trillion. This is like the government forcing you to be charitable, to people you have not vetted, and a Government employees are not as careful and efficient with your money as you. This leads to a lot of corruption and waste. How much better it would be if Government stayed small, efficient and gave We The People incentives to help others. What a wonderful world this would be! Government's moral role is to encourage charity, not administer BIG socialism that leads to unnecessary and fraudulent funding. Instead we have a Government taking our money borrowing even more money, see "Debt Inflation is the Real Existential Threat to US" below, inflating the economy for everybody.

During the worst of the COVID pandemic, March 2021, the Government Transfer Payments (GTP) peaked at over $5 trillion. In 2000 GTP was only $757 million, before the pandemic, March 2020, GTP had risen to $2.4 billion and after the pandemic, June 2022, $2.8 Trillion. We have become an Entitlement Nation, Socialism. A larger and larger percentage of corporations and people have given up on entrepreneurship and/or becoming more productive to earn a bigger slice of pie. They instead look for government entitlements. Politicians seeking loyal voters are willing to make more entitlements available to buy votes.

Bigger and bigger government spends more and more time and money on social engineering to solve problems that do no exist. Again these are political programs that fire up a political base but does little to make US more productive and happy. For example, Critical Race Theory (CRT), Black Lives Matter, Defund the Police and Sex/Gender are social issues that reaps fired up voters but inflates our economy, Free Market. At the same time our borders are open to the millions of immigrants who see The United States are far superior socially and economically to other countries; who come here without proper vetting and education to join our already growing entitlement recipients increasing government spending.

Two More Productivity Killing & Inflationary Things

(1) Climate Change

One more thing, Climate Change, the existential threat that President Biden is always talking about to politically scare, control and fire up Democrat voters. Lets compare the Biden Presidential Administration's climate change policies as they HUGELY AFFECTS all companies but mostly STARTUPS (77% see below) in our Free Market. The Woke Democrat's Green New Deal, fossil fuel limitations, and Environment, Social & Governance (ESG). The following points are derived from The 21 Most Important Startup Statistics for 2023.

  • The United States (USA) was home to 33.2 million small businesses in 2022.

  • 50% of these businesses fail in a pre-Biden policy world.

  • A 50-year-old startup founder is three times more likely to succeed than a 30- or 20-year-old founder.

  • 77% of startups rely on personal savings for their initial funds.

  • 81% of American small-business owners work overtime.

  • 77% of startups faced failure caused by the global COVID-19 pandemic in 2020.

  • Others

We can look to other make or break moments in USA history. There was John Kennedy's send a man to the moon and return him safely to earth by the end of the decade, the COVID virus and Biden policies to combat climate change. The difference between space, COVID and Biden polices is we had more time to plan, space program 9 years, COVID 0 years and Biden plan 50+ years. Productivity set records during the 1960's space program. Many new startups, new products and services were developed on the way to the moon. The difference we had a plan. Today we are asking the Free Market to behave like a blindfolded diver jumping off the diving board hopping there is water in the pool. Startup businesses spend their early years in survival mode. Poor government planning can deal a fatal blow.

The truth is the USA's Free Market, especially the startups, can not flourish without large quantities of inexpensive energy. Today that is fossil fuel. We must and use the cleaner fossil fuels until we do find alternatives such as nuclear fission/fusion. Wind and solar have too big an environmental footprint and endanger wildlife. It is entirely possible to use inexpensive power to fuel devices to remove carbon from earth's atmosphere. All we really need is leadership.

(2) Education

The second thing is our educational systems that has reduced teaching productive knowledge and skills and is instead teaching Woke-Racism, Sex/gender-Critical Race Theory (CRT), Diversity-Equity-Inclusion theory while ignoring competitive merit of the students to be productive members of society. The result is the first generation, raised on the social media smart phone, taught more about social issues than how to be successful in the Free Market for the rest of their life. Couple this poor education with the diversity and equity rather than merit hiring of employs such as air traffic controllers can create situations like happened today at Austin, Texas airport where a Fedex airplane landing and Southwest Airlines, passenger jet, taking off cleared on the same runway missed colliding with each by a few feet.

Both (1) and (2) leads to lower productivity and much higher inflation; making We The People poorer, much smaller piece of the pie.

Debt Inflation is the Real Existential Threat to US

The most damaging and crewel thing a government can do is to flood the Free Market with borrowed money that savagely eats your pie to pay back debt and interest. It is so tempting for politicians to "offer free stuff" while eating your slice of pie. This borrowed money is not backed by productivity of a product or service but it is able to buy whatever it wants. Therefore demand outruns supply and prices rise, INFLATION.

While it is true that debt can rise if productivity, GDP, increases as well. However, our productivity has slumped since 2000. Our debt to GDP ratio is set to zoom past the 1940s WWII era when we locked down the economy and rationed everything. Think about it.

Evidence of Destructive Growth of Government Spending

From 1947 to 2000 the US economy grew 3.5% per year, more than 50 years of growth. This prosperity in the United States lead the world. This is the United States Image that is attractive to so many immigrants whose countries can not come anywhere close to that record. From 2000 to TODAY the US economy grew only 2% per year loosing $9,000,000,000,000 of productivity while suffering greater than 2X the inflation experienced over the last 50 year period. Over just the next 10 years the US could loose another $8,500,000,000,000 of productivity, $75,000 per tax payor in the US. Government is getting bigger and bigger while the private sector, our pies, are getting smaller and smaller. Federal, State and Local Government consumes 44% of GDP, THE PIE, "folks we are on our way to BIG GOVERNMENT SOCIALISM", the facts and figures are those of Larry Kudlow, Fox Business News.

Conclusion Written by AI

The Chinese model of a socialist market economy, which has been in place since the late 1970s and has led to the country's impressive economic growth, provides a useful framework for understanding how a mix of capitalism and socialism can be successfully employed. China's system combines the advantages of both capitalist and socialist economic systems, allowing for market forces to drive economic growth while also allowing the government to maintain strong control over the direction of the economy. This model has allowed for the development of a large and diverse private sector, while also maintaining a large state-owned sector and providing support for public welfare programs. The success of this model has led to other countries, such as Vietnam, adopting similar systems.

What The ..... ?

Are you as shocked as I am about the conclusion drawn by AI? Are we really going to join the big China Communist Party, the CCP, and transform the USA to Big Government Socialism (BGS), loose our freedom and become capitalism enslaved to feed BGC. It was President Nixon starting in 1970 that opened the door to China and made the development of their flourishing capitalistic economy possible. However, CCP capitalism dictates a life for most that is less free and more like the early slaves in the USA south before the civil war. In China and in Russia there are 3 classes - the governing class, the entrepreneur class (oligarch) and the vast slave classes where most citizens live.

I am a true progressive liberal USA citizen. I believe in total free speech. I think We The People are diverse with many opinions and ideologies. I will listen to any idea or solution even if I disagree with it, it is valuable to hear everything to find the best and reaffirm or add to the best. I believe in merit and will always value it.

The CCP is not liberal; it is authoritative. The CCP is always progressive toward world domination. The CCP manipulates capitalism to identify opportunities to take advantage of other countries to increase it power. The CCP capitalism is like a spider web that attracts, manipulates/weakens and then harvests it's prey. There is only one country that will not fall prey to the CCP. That country is surly characterized by a Totally Free Market where it's people have libertarian freedom, Liberalism, and no matter their race have equal opportunity to create value to support themselves. Overall government is small and the biggest government is geographically close to the people governed. The government is to serve the people not to rule the people. It is crucial that this country not have a lot of debt, especially to China and not be dependent to China for products and resources. Any deviation means you are in China's spider web. The only question is our President already in the web?

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