FOR THE DAILY SOUTHERNER
Bob Harper
TARBORO —
There‚Äôs a lot of talk about “Our Economy” now... and how it ain’t doing so good. I know the word “ain’t” isn’t considered a proper word, but our economy isn’t very proper right now either.
Actual “Our Econom” is a bit of a misstatement itself. Our Economy is very much a global economy. Actually it’s been that way for hundreds of years. Remember the original Boston Tea Party on December 16, 1773 was all about the importing of tea. The colonies imported a lot back then and as our nation grew we began to export a lot too.
As the U.S. grew so did our exporting and importing, causing our standard of living to rise. When The Great Depression occurred in the early 1930s our leaders did what they thought was a smart thing, but it turned out to be a stupid thing. They blamed imports for causing a lot of our economic troubles. So they passed the Smoot/Hawley Act that raised tariffs on all imports.
What resulted was the other nations retaliated and raised their tariffs on what we were exporting. Shortly thereafter the Smoot/Hawley Act was repealed.
So we do have a global economy and we must realize that and live with it, but at the same time we still have to operate our own economy in a rational, sound manner. This is something we haven’t been doing in recent years.
We’ve been on a huge spending spree and consequently our debts are sky rocking and the world has taken notice and slowly, but surely, our citizens are beginning to take notice.
Our economy is lousy and our debt load keeps on climbing. We now owe China over $800 Billion, and climbing; we owe Japan over $750 billion and rising. Totally we owe foreign nations a total of $4.45 trillion. Some said that technically the recession is over, but with unemployment still around 9%, how can that be?
This past August, Standard & Poor’s downgraded our nation’s credit rating from AAA
To AA+ and the politicians in Washington screamed, “No, no, no.” But, if one of us burns through a dozen credit cards and don’t pay our debts can we protest when our credit rating sinks?
Now, with our economy as bad as it is, the Administration is calling for higher taxes on who ever the rich are. The prescription to get us out of a recession has always been to cut taxes. This is what Coolidge did in 1920 to get the nation out of a recession. JFK cut taxes across the board to end a recession in the early 1960s and Bill Clinton cut capital gains taxes to reverse an economic down turn.
But, why cut taxes on those terrible rich people. Well, the wealthy don’t keep their money buried in the backyard or in some giant vault. It’s invested. When it’s over taxed it has to come out of these investments that create jobs. One problem is now they are not investing their funds in an aggressive growth manner because Washington is not business friendly at all. The emphasis is only on creating government jobs, ignoring the fact that it takes four private sector workers to support one government job. It doesn’t help that we have one of the highest corporate taxes in the world, making our products more expensive for us and more difficult to export.
The idea that we need to raise taxes (taking funds out of the private sector) and continue to spend and spend on more government programs is absurd. Usually when taxes are cut (during tough times) more revenues begin to come in, because even at a lower tax rate more jobs are created and more taxes are paid.
