There’s an old saying that you shouldn’t bite the hand that feeds you. Unfortunately, politicians in Washington don’t follow that advice.
Let me explain. All economic theories – even Marxism and socialism – agree that capital formation is a necessary condition for long-run growth and higher wages.
The Marxists and the socialists are misguided in thinking that government has the capacity to be in charge of saving and investing, but at least they recognize that you have to set aside some of today’s income to finance tomorrow’s growth. And they even understand that capital formation leads to more productivity and higher wages.
The politicians, however, act as if they don’t understand the importance of saving and investment. Or, based on the policies we get from Washington, maybe they simply don’t care about the well-being of workers, savers, and investors.
Which is a very short-sighted attitude since capital formation…
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