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Location: La Mirada, California, United States

All original content on RickSpeak is the intellectual property of Rickspeak.

Saturday, October 01, 2005

The False Economic Hyperbole

Regarding our nation's economy and all the hyperbole that is said about it, here are some KEY facts that never seem to get mentioned regarding America's economy...

America produces a YEARLY economy of approximately $13 trillion
Total U.S. debt held in public hands will rise, in the next fiscal year, to $4 trillion
Total family net wealth -- which includes the value of our nation’s businesses, bonds, stocks, and real estate -- just hit an all-time high of $50 trillion.
The budget deficit will rise from roughly 2.5 percent of GDP to something over 4 percent.
Treasury issues (Bond Market) continue to trade around 4.25 percent.
The stock markets just registered their best third quarter in seven years.
Federal-debt-to-national-wealth ratio is at 8 percent
Global financing markets will underwrite new U.S. spending
(source: http://www.whitehouse.gov/news/usbudget/budget-fy2005/)

America can and will sustain its economy despite the recent hurricane devastation and higher global demand for oil. The reason for America's continued prosperity? LOWER TAXES!!! It is really a simple concept: The less a person is taxed on their income, the more they will spend on the economy which, in turn, spur business to create more jobs which create more payroll and retail taxes that can be sent to the government. This model has ALWAYS outperformed the higher tax model. Why? Because tax hikes are short term solutions that cannot sustain itself unless taxes are continually raised. Lower taxes sustain economic growth because it is self-generating and thus it is able to replenish the economy in the long term. It is not a "quick fix" which is why politicians who are short-sighted are always the first ones to call for higher taxes as if money magically appeared in the government's coffers.

The last three recessions were the direct result of raising taxes under President Jimmy Carter, George H.W. Bush, and Bill Clinton's second term. The economy righted itself after Presidents Ronald Reagan, Bill Clinton's first term, and George W. Bush's first term tax cuts.

California is the best example for lowering taxes. Under Gray Davis and the Democratic state legislature, it was insisted that the best way to balance the state budget was to raise taxes. California has been in fiscal chaos ever since.


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