Supply-Side Economics 101 (SSE) says, basically, lower taxes stimulates economic growth. This may be all well and good, philosphically, but it is a folly practicality. Here's why: Less taxes means reduced government income; it has been shown that whatever growth is attained doesn't make up for the loss in revenue until perhaps in the long term--20 years or longer. This deficit certainly wouldn't allow for balancing a budget which would require a "doubling down" of deficit spending. What would happen--what has happned EVERY time SSE has been employed--is payroll taxes would shoot up to ameliorate the deficit in government income, AND the reduction in spending (if any) never balances out the budget deficit. So, historically, implemeting SSE ends up as a depreciatory fiscal functionalty.
As can be seen from Reagan's SSE, Reaganonmics, and GWB's gigantic tax reduction acts, the national debt increased more than two-fold. My take: America will never get back on top unless we start to pay our debts "Pay-as-you-go," incrementally reduce spending, pay down the national debt, and completely overhaul our infrastructure. Doing this will require raising taxes. We have got to "suck it up" and live, as a country, more frugally.
As can be seen from Reagan's SSE, Reaganonmics, and GWB's gigantic tax reduction acts, the national debt increased more than two-fold. My take: America will never get back on top unless we start to pay our debts "Pay-as-you-go," incrementally reduce spending, pay down the national debt, and completely overhaul our infrastructure. Doing this will require raising taxes. We have got to "suck it up" and live, as a country, more frugally.
1 comment:
In spite of the Reagan tax cuts monies collected by the treasury doubled during his term. Unfortunately congress far outspent the increased revenue. SSE works but out of control gov't spending will break us all. There has to be a reduction in gov't spending, something we've never tried. Gov't exists at the expense of the private sector, eventually (if we stay on this course) we will kill the goose... China can buy us at a firesale and make us their serfs.
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