Thursday, February 14, 2008

Economic Stimulus

Hooray!!! We are all saved!!! The Government has decided to give the people back some of their money!!! AWESOME!!!

Wait a second... Economic Stimulus... Hummmm... What does that exactly mean? How will this stimulate the economy? Don't get me wrong. I love that the government is giving our money back, BUT will that really stimulate the economy?

Short answer yes with a but, long answer no with an although.

YES the tax rebate will stimulate the economy in the short term. At most the money received will pay for a couple tanks of gas, and a night on the town, but those rebate checks will not convince anyone to buy a house, start a business, or build something new. The things that really stimulate the economy. It just is not enough.

NO the economic stimulus will not stimulate the long term economy. You might as well say that it will hurt the long term economy. Why? Because the government is already spending too much money.

Last year they over spent what they took in by over $400 billion. Where did they get the extra money? Two ways.
One they borrowed it directly from anyone who bought US Treasury and other government bonds. This money goes directly in to the general fund, just like when you put money in to a savings account, the bank uses that money you gave it to fund somebody else's house.
The other way they get money is again from you and I, but they do it in a sneaker way. They print more money. This lessens the value of the dollar, making everything more expensive. Anybody notice the value of the dollar?

If the government really wanted to stimulate the economy they should do two things. First and foremost, they must balance the budget. No more deficits. How do they balance the budget? CUT SPENDING!!!!!! Let the states handle schools. They do a better job of it anyway. Bye, Bye Education department. The war on drugs is costing both the states and the federal government much much MUCH more than simply treating the addicts. Legalize drugs and set up "needle" zones or some such. Safer drugs, better treatment for addicts, less crime because morons won't be selling it any more. Who would you rather buy drugs from, the Crips in the bad neighborhood or Walgreens? Who would you rather make your drugs? Pablo Escobar or Pfizer? You might also say that the money is already IN the economy, we paid it to the government. The government handing out that money without cutting spending devalues the dollar further, thus it shrinks the actual value of the money we are getting.

Second, the government must be honest with themselves and conceded that ALL taxes are paid by the individual. Business don't pay taxes. It is an expense to them, and they pass that cost on to the price of their products. Who pays for their products? You and I do. Go ask the CFO of the company you work for about it. They will tell you, if you don't believe me.

After the government accepts that all taxes are paid by the individual, they must come up with a way to collect the taxes from the individual in such a way that will maintain the current level of revenue, yet not stifle individual spending which accounts for 70% of our economy. If only there was a way... It would have to be fair what ever way it is... hummmm... A fair way to collect taxes... hummmm... a fair tax... Holy Crap!!! The FAIRTAX does all of what I was describing AND it is a volentary system. Just like the framers of the Constitution wanted!!!! How about that.

If we make the US a tax haven for business, more business will locate themselves here. If business locate themselves here they bring jobs, you bring jobs you bring money which means... you stimulate the economy long term!!

Write me in for President.

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