America It's Up to You – More Taxes or More Jobs?

With the release of President’s Obama’s new budget, a critical debate has started to take place.  What’s the best way to create new jobs and economic growth?  Keynesian economists advocate increased government spending to create demand.  Of course, with increased spending, typically comes much higher taxes.  Some say that Obama’s new budget will result in $2T (Trillion!) dollars of new taxes over 10 years after a relatively small $150+B dollars in tax cuts is subtracted out.  The proposed budget also calls for about $1.6T in deficit spending.

New taxes represents “capital consumption” or the transfer of wealth away from the private sector to the government sector.  This tax money is money that could have been employed by the economy more efficiently and with a much higher economic multiplier, if spent by the private sector (individuals and businesses).  The dollars lost in the private sector (due to new taxes) will not be directly available for much needed “capital formation” necessary for creating new businesses and new jobs.

New taxes or new jobs?  It’s important for Amercians to make the right choice.  We all want greater prosperity.  We all can sense the pain and frustration of families without income, when a husband and wife are out of work.  The tax cuts of the early 1920’s (Harding-Coolidge), the 1960’s (JFK), and the 1980’s (Reagan tax cut) are clear examples of how lowering taxes increase economic growth and prosperity.  Raising taxes now will hurt America further.

The debate over more taxes vs. more jobs is one more battle in America’s Economic War.  You can read more about other battles in my recently released book, ”America’s Economic War – Your Freedom, Money and Life.” 

America it’s up to you – more taxes or more jobs?

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