Independent Views

a better America through independent thought

"If you want a new idea, read an old book."

Harry S. Truman

Why Tax Reductions are the Best Recourse

Posted By on March 28, 2010

With regularity, political pundits on the right will point to the Reagan-era tax cuts has having created millions of jobs while reducing deficits.  While the deficit reduction piece can be easily dispelled, the jobs created were real.  But, the cause and effect relationship between jobs and taxes is incorrect.

Much of the action of this administration is justified with the assurance that jobs will be created.  In actuality, nothing this administration is doing will create anything but additional government jobs.  The reason is that with every piece of legislation, this administration is negatively impacting the very thing that will create jobs.  Everything this administration and this congress does is reducing demand by reducing the ability of the American public to consume.   As I’ve addressed before, ours is a consumption-based economy, and only when we have the ability to consume is demand generated, and only when demand is generated will jobs be created to meet the increased demand.

Contrary to their stated goals of job creation, this administration’s, and this congress’s fiscal irresponsibility are reducing the availability of capital by dramatically increasing the deficits and the national debt.  These increases represent a demand on the money supply which is the single cause of inflation.  Additionally, the recently passed health care bill, sold as decreasing the cost of insurance, will cause the private insurance companies to increase the cost of their policies due to the mandated acceptance of those with pre-existing conditions, and/or place the cost burden on the federal government which will also increase the cost of insurance and will result in increased taxes to cover this ill-conceived welfare plan.  These tax increases will again pull money from the pockets of the consumer and have a negative impact on the economy.

Reagan-era tax cuts were successful because tax cuts placed increased money in the hands of consumers.  Consumption yields demand, and demand yields jobs.  If this administration has any true intentions of jump starting this economy to create jobs for the 8-ish million who have lost their jobs in this recent recession, they must abandon their silly ideology that pulls money from the individual and instead drive legislation that increases the ability of the American consumer to consume.  They must reduce taxes and do it now.

My recommendation for an immediate jump start for the economy–Implement the Fair Tax legislation that has been offered in both the House and Senate.  More to follow on the Fair Tax proposal.

The economic crisis simplified

Posted By on February 22, 2009

With every passing day, more and more jobs are being lost to the economic challenges of the U.S.  It is not a simple problem, but, perhaps, the problems and the solutions are not as complicated as many in our government might suggest.

The housing crisis (cause and effect to be discussed in another post) eliminated huge quantities of wealth from our economy.  People have less money to spend.

  • No money, no spending.
  • No spending, no demand.
  • No demand, no market.
  • No market, no production.
  • No production, no jobs.
  • No jobs, back to No Money.

Our economy is a consumption-based economy.  Growth occurs when people spend. Markets are created when demand exists.  Jobs are created to produce goods and serves demanded by the market consumers.

We do not need thousands or millions of new jobs now.  People need the jobs they had 6 months or 1 year ago now—The jobs that were driven by the consumption of the American citizen.

The solution could be much simpler than Congress is willing to admit and to implement—Restore the consumption ability of the American citizen today!  The current stimulus package falls woefully short, both in time and method.

While the ARRA does include tax relief, NONE is provided that increase the consumer’s consumption ability today.  All relief is in the form of deductions and credits, “against the tax imposed”,  on already burdened paychecks (We will get our taxes from you first, then give them back later.), or after paying toward the laundry list of eligible expenses provided for in the legislation (“Spend for things you currently can’t afford, then we will offer you deductions or credits when you file your taxes NEXT YEAR.)  With the exception of extending unemployment eligibility, there appear to be no provisions in the bill for increasing the consumption ability of our citizens.

So, in spite of $787 billion dollars of INCREASED deficit spending (watch for “Misappropriated Funds” post), we should expect little in the form of near term economic stimulus.  The “tax relief” will not be realized until we begin filing our tax returns NEXT YEAR.  And anyone who has ever been involved in the governments acquisition process knows the jobs that may be created by infrastructure investments will be years in coming.  No matter what sound bite is offered, you simply don’t start building a highway or restoring a bridge tomorrow.

Alternatives were offered.  It was, and still is, possible to put money directly into the hands and houses of EVERY working and unemployed American today by eliminating all payroll taxes.  More to follow, but see the The Fair Tax Book link.

This country is in dire need of infrastructure recapitalization, and this recapitalization needs to be addressed by Congress.  However, to laden the stimulus package, intended to jump start our economy, with deficit spending that will contribute little, if any, to the near-term restoration of jobs, was a disservice by those that work for us.

A new view today for tomorrow

Posted By on February 18, 2009

Today begins a new chapter in America with the debut of Independent Views.  No longer should we accept the interpretations of others.  We should listen to arguments from each side, gather the facts, and form our own opinions.  Look beyond the media sensationalism and polarizing journalism. There is good on both sides of the political fence.  The best of America will be realized when our best thinking is reflected in our future legislation.

However, current legislation does not reflect the best of American thinking and is not putting the U.S on a path for success.  Now, more than ever, is the time for us to actively engage in the process and to remind our government that they have been elected by us and for us.  They are our employees and, currently, they are severely underperforming.

Religion in america coming soon

Posted By on February 18, 2009

Coming soon

Personal responsibility coming soon

Posted By on February 18, 2009

Coming soon

International policy coming soon

Posted By on February 18, 2009

Coming soon

Education coming soon

Posted By on February 18, 2009

Coming Soon

Misappropriated Funds

Posted By on February 18, 2009

Congress has passed new “Stimulus” legislation

Survey feature

Posted By on February 14, 2009

Testing this feature<!– SURVEYS 1 –>