The Center on Budget and Policy Priorities recently published an article on letting the so called 'Bush' tax cuts expire and how we can use the possible increase revenue to take a bite out of the ballooning national deficit.
The way I see it is we are damned if we let it expire, damned if we don't.
On one hand, you could recover billions of dollars to use towards the deficit and help stimulate the economy. On the other hand, our government has a poor track record of spending our money wisely.
What is to stop congress from spending this new money on another endless war in a third-world nation, structureless social programs that have no return on investment or countless other pork that does nothing for the average American?
The way to get the economy going is to get Americans to spend money. No other group of Americans have been better at this then the middle class.
According to Alan Blinder, former Vice Chair of the Federal Reserve, the spending habits of different socioeconomic groups have vastly different impacts on how the dollar flows through our economy.
"Consider three different ways to add a dollar to the budget deficit: increase unemployment benefits by $1, give a $1 tax cut to someone earning $50,000 a year, or give a $1 tax cut to someone earning $5 million a year," said Blinder.
"While the immediate impacts on the budget are identical, the near-term spending impacts are not. The unemployed worker struggling to make ends meet will likely spend the entire dollar right away. The $50,000 earner probably will spend the lion's share of it, saving just a bit —that's what most Americans do. But the $5,000,000 earner probably will save most of the new-found dollar."
He goes on to say that unemployment benefits are one of the best forms of economic stimuli.
I'm not saying I agree with that part. While in the short term it may, I fear the long term effects of relying on safety nets to stimulate the economy will only further stagnate growth.
The middle class is were real growth comes from in America. We buy cars, build houses, go to movies, get an education, eat at restaurants and shop for both needs and wants. For a strong economy, you need the middle class family to spend their money.
The same goes for business in America. Most small business owners are middle class Americans.
They run their business, make a profit, pay taxes, hire employees that pay their taxes. Other middle class Americans shop at these businesses, which generates taxes that support schools, police, fire departments. These services are staffed by other middle class Americans.
Too much focus has been put on big business, ultra rich and do-nothing government pork. In my opinion, if you want this country to be great again, get the wealth back down to the people that stimulate the economy the best. Get the middle class back to work!
The way I see it is we are damned if we let it expire, damned if we don't.
On one hand, you could recover billions of dollars to use towards the deficit and help stimulate the economy. On the other hand, our government has a poor track record of spending our money wisely.
What is to stop congress from spending this new money on another endless war in a third-world nation, structureless social programs that have no return on investment or countless other pork that does nothing for the average American?
The way to get the economy going is to get Americans to spend money. No other group of Americans have been better at this then the middle class.
According to Alan Blinder, former Vice Chair of the Federal Reserve, the spending habits of different socioeconomic groups have vastly different impacts on how the dollar flows through our economy.
"Consider three different ways to add a dollar to the budget deficit: increase unemployment benefits by $1, give a $1 tax cut to someone earning $50,000 a year, or give a $1 tax cut to someone earning $5 million a year," said Blinder.
"While the immediate impacts on the budget are identical, the near-term spending impacts are not. The unemployed worker struggling to make ends meet will likely spend the entire dollar right away. The $50,000 earner probably will spend the lion's share of it, saving just a bit —that's what most Americans do. But the $5,000,000 earner probably will save most of the new-found dollar."
He goes on to say that unemployment benefits are one of the best forms of economic stimuli.
I'm not saying I agree with that part. While in the short term it may, I fear the long term effects of relying on safety nets to stimulate the economy will only further stagnate growth.
The middle class is were real growth comes from in America. We buy cars, build houses, go to movies, get an education, eat at restaurants and shop for both needs and wants. For a strong economy, you need the middle class family to spend their money.
The same goes for business in America. Most small business owners are middle class Americans.
They run their business, make a profit, pay taxes, hire employees that pay their taxes. Other middle class Americans shop at these businesses, which generates taxes that support schools, police, fire departments. These services are staffed by other middle class Americans.
Too much focus has been put on big business, ultra rich and do-nothing government pork. In my opinion, if you want this country to be great again, get the wealth back down to the people that stimulate the economy the best. Get the middle class back to work!
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