Originally Posted by
TopekaRoy
Good question Chiefster.
Let me start by telling you how you don't grow the economy. You don't grow the economy with government stimulus packages. There are two problems with stimulus spending. The first is that it doesn't put any more money into the economy because every dollar spent by the government must first come out of the private sector, so you are not really increasing spending; you are just changing where the spending comes from.
The second problem is that government spending doesn't increase the demand for products in the long term, so as soon as the stimulus money runs out, the unemployment rate goes back up. it doesn't increase consumer demand for products; it just lets the government decide which products will succeed or not.
This is clearly illustrated by the fact that Obama told us we must pass the stimulus package to keep the unemployment rate from going above 8%. It subsequently went up to 10%. Later, Obama laughed that "I guess shovel ready jobs weren't as shovel ready as we thought, heh heh." Meanwhile, over $800 billion was wasted and much of that money went to produce jobs overseas (outsourcing taxpayer dollars).
Are you worried that Big Bird will lose his job if Romney gets elected? Don't Be. Obama already took care of him with over $1 million in the stimulus package. The money was to come out of the heath and human services section to promote healthy eating. it produced 1.47 jobs. No that's not a misprint. The decimal point is supposed to be there.
There is no big secret to stimulating the economy. The economy is stimulated when people spend more money on things they want to buy. There are two ways to accomplish this. One is to lower taxes so that people keep more of the money they earn. Obama thinks you can grow the economy "from the middle out," but most of the middle class are in debt and will use any small tax cuts to pay off their debts faster, rather than use that money as disposable income to buy more "stuff." Romney's plan is to cut taxes "across the board" so that not only the middle class have more money to spend, but the wealthy will have more money to produce and sell their products and services: which means more people have money to buy other peoples goods and services.
The second way to increase consumer spending is to lower the expenses for consumers. One of these biggest expenses is gasoline. Romney wants to increase domestic drilling which will immediately produce jobs in the oil industry. of course these people will buy stuff which will increase demand for other products and put more people to work, and increasing demand for other products and so on ...But the other benefit is that is will eventually lower the price of gas, allowing people to keep more of the money they earn, so they can buy more stuff.
The side benefit of more people working (and paying taxes) is that the government revenues increase and that extra money can be used to reduce the deficit--if politicians use that money responsibly. We saw government revenues increase when Reagan cut taxes and again when Bush cut taxes after 9/11. We know it works because we have seen it work in the past.