I have been listening with great interest the debate in the media concerning the current economic problems here in the U.S. and even the world. The democrats think that taking money from the wealthy and giving more hand outs to the unemployed will somehow stimulate the economy and cause businesses to start hiring. This is completely illogical. The republicans want to lower taxes so that everyone has more money to spend. The idea being that if the wealthy have more money and businesses have more money, they will be more likely to spend it on hiring more employees. This is a more logical approach, but it is still flawed.
We have a multitude of economic problems that need to be addressed. They are all somewhat related, but should probably be addressed separately. Lower taxes for individuals will provide additional funds that can be used to help stimulate the economy. It can help increase demand for products and services. This increase in demand will cause businesses to hire more people to meet the demand. This is the approach that President Reagan took which worked beautifully. This is the approach that the Tea Party and most conservatives prefer. The problem with this approach is at some point the tax rate can get too low so that it can negatively affected government revenue despite the increase in people paying taxes. Another drawback is the assumption that the additional money will be spent and not saved or used to pay down existing debt. If the money is not spent then the increase in demand will not exist to stimulate the needed hiring.
Other economic issues that need to be addressed are the country’s debt and the trade deficit. I am not a fan of free trade. The concept of free trade will only work if the trade is equal on both sides. Right now there is an imbalance in just about every trade agreement we have with other countries. Some are in our favor but most are not in our favor. For instance, any nation that can produce goods cheaper than we can will have an advantage. They won’t have the demand for our expensive goods as our demand will be for their inexpensive goods.
The U.S. debt is the biggest issue. The current president and the democrats want to raise taxes so that they will not have to cut any of their pet projects. They tell us that all they want to do is close some loop holes in the tax code that affect the wealthy. Let’s think about that for a moment. I lost my job last year. I found another job about two months later. This sounds good but the new job pays me 20,000 dollars less a year. That is a huge decrease in pay. I am just barely making ends meet. If the president closes a loop hole that the oil companies use, then this will affect me. It could affect me enough that I lose my home because I will no longer be able to make ends meet. The oil companies will have to raise prices so that their profit margins will remain the same. The increase in price will cause the local utility to have to raise their price of electricity. The price of gasoline for my car will have to go up. This will also affect the cost of food since it will cost more to transport the food to my grocery store.
You see, closing a loop hole will not just affect the wealthy. It will affect everyone down the line. The democrats don’t understand this. This is why the Tea Party exists. They are regular people that do understand the true ramifications of these actions. They are trying to stop these actions so that no more people have to lose homes, jobs or both. Call your representative in Congress and encourage them not to agree to any tax hike. We can freeze the tax rates as they are, but we cannot raise them even through closing loop holes.
Pete
Tags: congress, debt, deficit, democrat, Economy, electricity, gasoline, hole, job, loop, oil, pay, President, Reagan, republican, tax, tea party, trade, wealthy
