History may mislead you but it will never lie to you. The facts are that tax cuts are the most reliable way to boost an economy. If you think I am lying, do a little research on the lost decade in Japan and you will learn what spending can do. California is a state that has done a tremendous amount of spending and is so far in debt they cannot see straight, like a mini Dubai. What I am getting at is that we need to stop spending and start focusing on tax cuts. Washington is finally starting to realize this and has begun talking about cutting taxes up to 20% for small business. This is great, but this is not going to create what these business need. Small business need one thing and that is customers. The way you get customers into these small businesses is put money in the consumer’s hands. To get money into the consumer’s hands you need this thing call tax cuts for the consumers. Really, is it that simple? Well it is much more complex, but this is how it works. Talking with many established businesspersons, they would much rather have customers then tax cuts. The whole point is we need to stop the spending, get the money into the consumer’s hands, and let them spend. If we want to cut the taxes for small businesses great, but let’s cut the taxes for the consumers as well. This is the fastest way to get out of a recession according to history, and remember history does not lie.
Just to be a devils advocate... Isn't the government one of the largest consumers? And how do you prevent people from saving rather than spending the money you give back to them? In economic times like these, don't people tend to save their money rather than spend it?
ReplyDeleteI agree with you that people tend to hold onto money and not spend money during a recession. The purpose of tax cuts is to get money back into the hand of the American People and increase consumer confidence. If consumer confidence is low people will not spend, but when more money comes home confidence begins to increase. Last month we saw consumer spending up from last season. Therefore, in response to your question, how do you get people to spend? You have to increase confidence, by putting money into their pocket. People are starting to spend again slowly and with a boost from tax cuts, I believe we could see higher spending numbers and come out of this recession faster and without a threat of inflation.
ReplyDeleteColby Wiesman
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