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Obama, Romney, and the Budget Solution

October 29, 2012

Is there a quick fix to our economy?

While I have posted both serious and humorous thoughts about our economy and budget solutions,  the reality is that there is no magical instant fix, no painless solution, no effortless recovery from our current economic crisis.

What would President Obama or Governor Romney do to “fix” the economy?

Both of our Presidential candidates  have shared at least some of their views about the best strategy for bringing a real economic recovery.  Both of their plans involve changing taxes.

What role do taxes play in President Obama's economic solution? What role do taxes play in Governor Romney's economic solutions?

President Obama would like to raise taxes.  The proposed taxes would strike the entire American people, not just the wealthy.  He would like to have the government take over health-care.  He tells us that spending more for education will bring skilled jobs back to America, and that we need to spend more to stimulate our economy.

Governor Romney wants to reduce taxes, primarily corporate taxes, but other taxes as well.  He talks about making America an attractive place for business again.  He tells us that reducing taxes will encourage job creation and thereby raise the governments income without increasing the individual’s tax burden.

Which economic solution is more likely to work?

In my opinion, the economic strategies put forward by President Obama will lead us directly back into the dark ages.  Government ownership of land and assets coupled with direct control of people’s jobs sounds like something out of the 1300’s.

Governor Romney’s plan, while far from perfect, actually makes some sense.

Why is reducing taxes beneficial to our economy?

There are several benefits of reducing taxes.  Here are two of the biggest ones.

Reducing taxes encourages the wealthy to reinvest in our economy

I have heard rumors that some people think reducing taxes on corporations and wealthy will not create jobs.  I would like to disprove that theory.

The notion that money is just left in banks and thereby does no good is ludicrous.  Most wealthy people are looking for opportunities to invest and increase their wealth.  They are savvy, careful, and purposeful in what they do.

Those who are not actively looking to increase their wealth may put it in a bank to draw interest.  However, banks do not have some magic room in the back where money grows.  Banks can afford to pay interest on moneys they hold because they cautiously invest to increase the money at their disposal.  They too are buying back into the economy, helping it to grow.  Also, unlike the government, the bank cannot just print more money if their ventures fail.  This causes a greater caution and a more personal concern about risk and reward.

Reducing taxes can actually increase government revenue

Since reducing taxes will aid in creating jobs, it stands to reason that there will be an increase in the number of taxpayers.  Increasing the number of people sharing the burden of our government seems far more practical to me than increasing each persons share of the burden.

Let me give you an example:

There is a certain gas station on the south side of Indianapolis that is known for having lower prices than anywhere else.  The difference is only a couple of pennies, but it is consistent.  Because people know that they will find lower prices there, they plan their trips so that they can re-fuel at this particular station.

That gas station is almost ALWAYS busy.  I’m sure if you were to ask the owner, you would find that they do a large amount of business in the convenience store also.  All this is because they made an attractive environment for their business.  They might make a couple pennies less on each gallon that they sell, but they make up for that with a huge volume of sales.

Reducing taxes would be very beneficial to our society.  It is time we bring jobs back to our shores.  It is time that we as Americans take home a greater portion of our paychecks.  It is time for economic responsibility.

In my opinion, it is time for change.

Thanks for reading my ramblings,

Dave

Taxes - Obama wants to raise them? Romney wants to lower them? What should we do?

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