Originally Posted by R.D.BID
You're only saying that peoples comprehension of economics is abysmal is because they are not agreeing with you.
You seem to view the economy from a Keynesian economic stand point and it doesn't really work.
Where do you think the government gets money to spend? From taxes, right? To think that taking money out of the private sector and putting in to the public sector is going to solve this? We are all well aware of how inefficient the public sector is with money. I think I remember something about shovel ready jobs not being so shovel ready.
Less taxation keeps the money in the private sector where it belongs. If people have more money, they have a tendancy to spend it. If small business has more money, they spend it, grow their business and hire more people who in turn pay taxes on their earnings.
They can now afford to buy things, which are taxed. By lowering taxes you will increase the amount of tax revenue because the private sector can spend more. And when you have more jobs, those people are now paying taxes and you've broadened the tax base. Its created more tax payers!
Government spending does none of that. All it does is move money around by taking it from one area and putting it in another. It creates no new money. It's like taking a bucket of water from one end of the pool and dumping it into the other end and expecting it to fill up.
The last thing you want to do druing a recession is increase tax rates. Even the current president said that. Increased government spending does stall recovery and it prolongs recession because it reduces cash flow in the market. Keep the money in the private sector and let the free market work.
On a side note, I couldn't agree more with your side note.
Hey RD! Well at least someone responded with an actual argument.
I see a few flaws in your argument, the Bush Tax Cuts have not worked. The trickle down does not work. Look at the current state of affairs, would we be where we are if taxes had not been cut so drastically 10+ years ago? I cannot answer that question as there have been many other issues compounding the finance problem, ie Iraq/Afghan Wars and their subsequently large expenditures, bubble burst etc etc. But it could easily be extrapolated that if tax revenue had not been decreased then we would be in less
Another issue I see with your argument is that people are not spending money as wantonly as you might believe. Many are so consumed with fear and worry about the future that they are holding their cards or folding instead of playing the hand. Even if a small business is expanding and hiring and increasing employee purchasing power, the employees are often buying goods that aren't taxed. Because of the prevalence of online shopping people are not paying as much in sales tax as they were 20 years ago. Thus the bill in question.
I am not saying to increase taxes to astronomical levels, just back to previous levels. Like the Clinton era, you know when we had a surplus.
Also, Who said that they needed to put all the money into shovel ready jobs. I think tons of money should go into alternative energy R&D as well as other R&D programs. By creating new tech or increasing efficiency on something like solar, via increased government funds, then bringing that tech to market, you would be creating jobs and progressing the market. Sell solar panels to china, manufacture them here, i see job jobs jobs and money money money. If the government would spend in the right sectors they do have the ability to stimulate the economy. Free market might work this out, except we have 10-15 big bullies in the school yard who bend the market/government to their will. Which sort of makes this a self defeating argument... lol. The government could help but they are basically owned so whatevs. -sigh-
Honestly, it is all a huge mess and there is no easy or clear answer. Currently Politics are very frustrating and congress makes me sick. But we need to do something.
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