Unintended Consequences of a New Government Policy

In the news today is an article about the possibility of Microsoft moving the bulk of its labor force over-seas as a result of President Obama's new initiative against corporate overseas tax havens (click post title to see the article). As the article points out, this is not surprising for those of us who understand how expensive it already is to run a business in the United States. Now President Obama is going to make it even harder for a company to be profitable in hopes of raising revenue to support his plethora of "political pet projects." 

The question a logical person would pose is how much longer this foolhardy idea of continuously raising taxes, without addressing any of the spending issues, will continue. The federal government is already in debt $11 trillion, mostly from printing new money to cover the spending habits of our benevolent politicians. Most Americans, myself included, can not even fathom how much money that really is. (As I recall Glenn Beck did a good job of showing the enormous amount of money the federal government spends.) Eventually there will be a point where the economy can no longer hold up the huge bureaucratic spending load our politicians insist on exponentially increasing. Atlas will shrug its just a question of when. 

One can already see the beginnings of a corporate exodus. Globalization is forcing companies to remain competitive in what prices they charge for products. With the regulations, mandates, tax rates, etc that the federal government forces on these companies there is no possible way for a company to be profitable without outsourcing some portion of the business overseas. Even Apple Inc. attempted to manufacture the iPod in America. Then reality stuck home. When will our benevolent bureaucrats realize they are the ones responsible for companies moving overseas? People like to blame to companies, but it is simply not true. Its cheaper to make the product overseas and ship it across the Pacific Ocean then it is to manufacture it here at home.

These tax hikes ultimately hurt the American people because as more manufacturing is outsourced the domestic manufacturing slowing diminishes. This is what happened to the steel industry, the car industry, the electronic industry, and the list goes on. America use to be a self sufficient country that exported the excess goods that it produced. Now the United States has become a debtor nation because it can no longer produce enough at a competitive level, so it must buy from abroad to fill the demand. Until the government allows companies to be profitable again, through deregulation, decreasing the taxes, cutting spending, and embracing the benefits of a free market, we will continue to see the once bountiful U.S. economy outsourced and moved off-shore.