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Attention Elizabeth Warren: This is not China

An economics lesson for Elizabeth Warren.

Just this week, I have been seeing a political ad put out by the Elizabeth Warren for US Senate campaign.  In this ad, she says “We’ve got bridges and roads in need of repair and thousands of people in need of work. Why aren’t we rebuilding America? Our competitors are putting people to work, building a future. China invests 9 percent of its GDP in infrastructure. America? We’re at just 2.4 percent. We can do better.” When I heard this ad, I was again struck by the ineptitude of Ms. Warren.

It seems that she doesn't understand what GDP means.  So, for Elizabeth's sake, here goes.  GDP stands for Gross Domestic Product.  Gross Domestic Product is the total of all goods and services produced in the country. The word "gross" signifies that it is BEFORE deducting expenses.  So, Ms. Warren thinks that we should spend 9 percent of our GDP on roads and bridges? Does she not realize that many businesses operate on less than 9 percent profit? Tax dollars are paid out of profit, not our of GDP.  So, if we would be spending 9% of our GDP, then what is the amount that we would be taxing people out of their profits? Never mind that roads and bridges are not the only thing that tax dollars need to pay for.  We still have to pay for teachers, police, our military, state parks, the whopping Obamacare system and IRS worker's salaries.  

Does Ms. Warren think that businesses can still run if we tax ALL of their profits? That would lead to more unemployment, which we certainly don't need.  Does she not realize that if they don't go out of business, they would need to raise their prices considerably? I guess she isn't concerned about inflation either.

Maybe Ms. Warren doesn't realize that we shouldn't be modeling ourselves after other countries.  China has huge areas that have no roads or bridges.  Then again, there are areas where there are "ghost towns". These are areas with unused public buildings and miles of unused roads.  Here is a link to a newspaper article from the UK Daily Mail that highlights this economic folly

Elizabeth Warren, this is not China. This is Massachusetts, which is located in the United States of America.

I strongly urge all of you to support Scott Brown. He has the common sense not to be trying to model our country after a communist nation.  Please vote for Scott Brown.  Beyond that, please consider helping with the Scott Brown campaign. Put a Scott Brown bumper sticker on your car or a Scott Brown sign on your lawn. Or maybe you can help with phone calls or door knocking. The official Scott Brown campaign website is www.scottbrown.com.

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Sinclair August 03, 2012 at 08:02 PM
China's population is aprox 1.3 billion. The most recent poverty stats are about 13% The U.S. poverty level is currently at 15.1%. That's bad news for both countries. We're the wealthiest country and a large part of our mortagae is owed to China. So do you personally think that China's economy is in poor shape when it has actually been doing well.?
Patty Vigeant Locke August 03, 2012 at 08:11 PM
Hmm. Currently, our Massachusetts gas tax is 41.9 cents per gallon and our fedral gas tax is an additional 18 1/2 cents per gallon, bringing the total to over 60 cents per gallon. In response to Sinclair's comments about Eisenhower- Eisenhower saw the need to create highways for defense purposes at a time when we had practically no highways at all. You state that federal spending was about 18% of GDP at the time. My point was that Ms. Warren wanted to increase spending on infrastructure alone from the current 2.4% of GDP to 9% of GDP. If we are currently spending 24.1% of GDP overall and added the additional 6.6% for extra infrastructure spending that Ms. Warren is looking for, it would bring our total spending to 30.7% of GDP. That is just crazy and irresponsible. Here is a quote from Factcheck.org: " Perhaps the most relevant measure of federal spending is how it compares with the nation’s total economic output, as measured by gross domestic product. And spending in fiscal 2009 hit 25.2 percent of GDP — the highest since 1945. It hasn’t come down much since that postwar record. It was 24.1 percent of GDP in both fiscal 2010 and 2011. Spending for each of the last three fiscal years was higher than any since 1946."
Sinclair August 03, 2012 at 09:11 PM
Elizbeth Warren did not state that we should spend 9% GDP according to your original write-up. She said we could do better than 2.4%.
Janet Sroczynski August 09, 2012 at 04:43 PM
The Howie Carr Show of WRKO/AM680- 1) http://audio.wrko.com/a/61132675/welfare-voter-round-up.htm Watch the video.
Dolly August 14, 2012 at 11:56 AM
Let's all remeber that Ms Warren brags about her being the person that started the OCCUPY wallstreet movement......do we need to say more.....

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