Is it really hard to Stimulate the Economy? Well I don't think so!
Originally Published in 2009
As President Barack Obama tries to work with the Democrats and Republicans in Congress to get his New Administration's Stimulus Package passed, I just think why are they making this so hard? When I see the Democrats with their heads between their legs thinking it is even possible for them to work with the Republicans, and the Republicans acting like they will even consider anything that is presented to them, it is almost like a Clown festival to me. It also makes me think back to after 911 when President George Bush's Administration stated we needed to Stimulate the Economy, which soon turned into Tax Cuts. Basically I think both the Republicans and Democrats know exactly how to Stimulate the Economy, they just can not be honest about it and get it done because they are Politicians. Most economist know that the best way to Stimulate the Economy is to get money into the hands of people that will spend it immediately, which has NOTHING to do with what someone thinks about Tax Policy. As soon as we start talking about Tax Cuts it becomes a Fairness issue and a Class Issue. Then we start to get questions like; Is it fair to give money to people that pay very little in Federal Taxes? Shouldn't the people that pay the most taxes get the most Tax Cuts? Then they start calling each other names and making statments like Socialist, Wealth Re-distribution, etc. The problem with Politicians and the Media bringing up all of this baggage is, the FACT that we are talking about Stimulus NOT TAX Policy.
What has to be considered is the fact that many Politicians have to deal with a SELECT number of people that have access to them that do NOT want to Stimulate the Economy, because of a disrespect or hate for certain groups of people. They are so afraid certain people might benefit from Stimulus they rather have the whole country go into a full blown reccession. Then the Politicians take that and start selling the public bogus reasons why something is good or bad. Right now, it is the Republicans doing their best to prove they don't have a clue, and the Democrats are proving they have little or NO Backbone. It almost makes me laugh when I hear the Republicans say it is too much spending, after the last 8 years. Especially when they are still willing to give more Tax Cuts, which have proved NOT TO WORK. Even though I do agree with the Republicans that this is a lot of spending, I do think we need to do something and TAX Cuts is NOT something we should consider. I just wonder if noone is making any real money, who needs Tax Cuts right now? Tax Cuts and related types of Tax Policy CAN WORK however only with Strings Attached. Tax Policy that tells us to just give Tax Cuts and HOPE they make investments that help mass numbers of people is unrealistic and in my opinion disingenuous.
Now, here is a few examples of how easy it is to Stimulate the Economy.
1. Give the WORKING CLASS Families money directly, I say Working Class because many Politicians are afraid to talk about the people that WORK, but may not be part of the Middle Class, you know like the people that work Full-Time at Mass Retailers, Restaurants, Small Manfacturers, etc. They will SPENT the money immediately which is Stimulus. Of course, the Politicans would say they don't pay Taxes, which in fact they like MOST people pay all kinds of TAXES, Payroll Tax, State Taxes, Phone Taxes, Energy Taxes, Property Taxes, Sales Tax, etc. Just think about it. What percentage of a person's income is the $100 Tax he/she pays to Register a Car if a person makes $18,000 versus a person that makes $180,000. The tax is the Same but the percentage is NOT! You can use that method on just about any Tax, excluding Federal Taxes. This is the BEST way to Stimulate the Economy, but because we Fellow Americans HATE each other so much we just can not handle the fact that some that either don't work as hard as us or are less fortunate will be able to Spend.
2. Pick any Industry, Retail, Automotive, etc., that you want to Stimulate and give people Debit/Voucher/Gift Cards(whatever you want to call it) that give a certain amount of Money to spend or toward a purchase. For Example, instead of bailing out the Auto Industry, you could have given vouchers toward the purchase of a Vehicle which would INCREASE Demand, which in turn would FORCE Auto Makers to Manufacture more cars, which would either Stimulate Job Growth, Prevent Job Loss, and even have a Positive effect on the Financial Industry. The proof that this works, look at the Food Stamp program. Most people think of it from the WRONG view. They think about how people are using this Program, and whether they should or not. What we should be thinking about is HOW do you think the MAJOR Grocery Stores feel about this program, do you think they like all that Government MONEY at the beginning of the Month or not? Actually if it wasn't for the Food Stamp Program, we would be talking about even more Job Loss. Think about it, every month the Major Grocery Stores know they will be getting a bunch of business, so they MUST keep employees.
3. Easy or Guaranteed Government Loan Program for Small Businesses with strings attached. They MUST hire a certain number of Employees, which would be based on the amount they request and receive in the Loan. Small Business is the one area that could create Tremendous Job Growth if stimulated. And I do NOT mean so called HUGE Companies that don't have a lot of employees or outsource a bunch but are considered Small Businesses. I am talking about REAL Small Businesses.
4. Government Contract Projects tied to Hiring. Basically make it so that if you are NOT willing to Hire you are NOT going to get a Government Contract. This can also get a lot of FRESH Businesses into the Government Contract Process, because Smaller Businesses would be more open to hiring New Employees because they will need them to do the work. Also we need some FRESH Companies in this area, because this is where a lot of FRAUD and Government Pork comes into play. I think alot of Americans do not realize how much the Government CREATES or Maintains Wealth in the United States. I consider myself a REAL Independent Conservative, NOT Republican. I've heard many times over the years so called Conservative Business Enthusiast and Politicians say how people should create their own opportunities, pull themselves up by the BootStraps, etc., which is hilarious when you consider so many of these same people are Actually getting rich from Goverment Connections and Government Contracts, NOT because they were ingenious in creating their own opportunities, or they were better at "BootStrapping."
5. Raise Taxes on the Top 1 or 2 Percent and/or Capital Gains with an Investment Exemption. I know raising Taxes is a Dirty Word, and to be honest I would not believe if you had asked me in past years, I would say it wasn't needed. The problem we are having with Tax Cuts NOT WORKING is due to the fact that we are hoping when we Cut Taxes it will result in the beneficiaries making investments; however, the fact is, they are not. So we need to raise Taxes, but if they actually make investments they will NOT have their Taxes raised and actually may get a Tax Cut. The key to this is it has to be closely monitored and enforced. Again, Tax Cuts can work, but the Trickle Down concept does not; unless procedures are in place to make Tax Cut recipients want to make Investments.
6. Longterm, Get rid of the Federal/State Tax Code and change to a National Sales/Consumption Tax. This way everyone would pay Taxes, even the people that make money in ways they probably should not, and even the RICH people who's whole existence is based on NOT paying Taxes would have to pay taxes when they buy something; or of course, they would NOT buy anything, so they would not pay a lot of taxes. Also there would be an additional Stimulus from all the Visitors of the United States that would pay the same as any American if they purchase which they will. Of course it would be easy to put in safety for the Poor. I think this would be a HUGE Positive to Americans, if it happened; however, this policy is NOT likely to get anywhere, because it would take a lot of people and a tremendously strong leader to make it happen in the face of all the Lobbyists in Washington, DC.