Bamba Laye: As usual, good write-up below! Needless to say, I look forward to reading your take on the latest Budget Speech. God willing, I'll give my take on the 2003 Budget Speech at the weekend. Jabou: I wish you speedy recovery. I hope you Doctor has prescribed enough anti-biotics for you. Ebrima Ceesay >From: BambaLaye <[log in to unmask]> >Reply-To: The Gambia and related-issues mailing list ><[log in to unmask]> >To: [log in to unmask] >Subject: Famara Jatta's Prescription for Catastrophe >Date: Wed, 18 Dec 2002 08:09:13 -0500 > >Since you'd have to hail from the Darth Vader School of Economic Policy >to want to hike taxes when the economy is hurting, the real aim of >Famara Jatta's 'prescription for catastrophe,' is to appease the codicils >of >the Kanialai Emperor's looting and booting scheme. > >The basic lessons of tax policies are as old as Adam Smith - in most >every instance, the more a good or service is taxed, the less of it is >supplied and demanded. So if Fams is trying to raise more revenue >through higher taxes without incentives for increase in income, chances >are there will be lower consumption. An increase in sales taxes will lead >to fewer sales, and an increase in taxes on businesses will lead to fewer >businesses to employ workers. Translation? Deeper economic trouble. > >Tax hikes can do damage to an economy at a vulnerable moment like >ours. While there may be some success in closing the budget deficits >through a variety of tax increases, the victory will be pyrrhic. The >economic evidence is very clear that these tax increases will hurt the >economy, lower incomes, and slow business creation as economic activity >will tend to move to low-tax locations. This is obviously a high price to >pay to avoid making tough choices on government policy of state >spending or should I say Emperor Jammeh's impulsive spending policy, >for lack of a better expression. > >Some economic think tanks have identified several possible approaches >to alleviate and ultimately resolve a deficit problem. Some prominent >economists, like Milton Friedman, object to tax hikes as a means to >reducing budget deficits and advocate, instead, tax cuts to achieve that >objective. Others, for example, Robert Barro, reject these tax-oriented >solutions and argue that a better strategy lies in spending cuts, provided >there exists a concrete spending policy. These opposing postures are of >course based on the presumption that the two components of the >government budget – tax hikes and spending cuts - are interrelated. > >Fams' contention seem to be with those who argue the opposite that >government spending and taxation are independent of each other. They >believe that any tax hike can reduce the deficit because spending will >remain constant in the process. Clearly, policy implications and the >proper strategy to resolve the deficit predicament – which Fams' seem to >have ignored in his projections – should be sensitive to the particular >relation between government spending and taxation. Just imagine how >many second-hand generators or tractors Yahya would want to buy out >of the blue knowing that government revenues have doubled in three >months. Not to talk about the brown bag exchanges that goes on behind >closed doors/under the table. Such negligent disregard of strategic >planning is what we have to deal with. Simply inept! > >Folks, the shit is coming down the hill and guess who's at the bottom of >the hill. > >-BambaLye _________________________________________________________________ Help STOP SPAM with the new MSN 8 and get 2 months FREE* http://join.msn.com/?page=features/junkmail ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ To unsubscribe/subscribe or view archives of postings, go to the Gambia-L Web interface at: http://maelstrom.stjohns.edu/archives/gambia-l.html To contact the List Management, please send an e-mail to: [log in to unmask] ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~