The two political parties and the candidates who represent them offer very different views of the tools that should be used to stimulate the economy and create jobs.
Candidates Mitt Romney and Paul Ryan subscribe to trickle-down economics. In their world, job creators are the wealthiest among us. The wealthy have the money to invest. When they invest, they create jobs for the rest of us. Following this theory of job creation, Romney and Ryan would maintain all of the Bush-era tax cuts and slash the historically low tax rates even farther, giving the wealthy another huge break in taxes.
Trickle-down has three major problems. If it worked, we would not be in the current economic slump, because we have tried it over the past three decades. It has not worked. Second, it assumes capital is not available for investment. In fact, the wealthy have done very well in recent decades. They now control more of our national wealth than they have at anytime since the Gilded Age. Major corporations are sitting on huge amounts of cash. And the cost of borrowing is nearly zero. Investments are not being made because potential investors are afraid that the products and services that would be created will not be sold. Demand is weak.
President Barack Obama and Vice President Joe Biden offer a different approach. They would stimulate demand by retaining the Bush tax cuts for the middle class and even for the wealthy on income of less than $250,000. They have already implemented policies such as the payroll tax holiday that gave all working Americans a tax cut. Tax breaks for the middle- and lower-income people put dollars into the pockets of people who spend. Lower-income people spend all that is available to them just to survive. Middle-income people may have more discretion in their spending, but with more disposal income they will buy the new car or appliance or enjoy more dinners out.
Obama and Biden also suggest a broader approach to ensure that the economy is healthy in the long run. They recommend investments in our infrastructure to rebuild our highways, transit systems, electrical networks and water systems.
These investments will create jobs immediately and make our country more competitive in the future. They recognize that only a well-trained and adaptable work force will allow us to compete, so they would invest in education both for our young people and for existing workers. Finally, they understand that innovation has always been a key ingredient in America’s economic health, so they would invest in basic research.
The November election will determine which approach we follow. If you really believe putting more money into the Koch brothers’ pockets will improve the stock of all Americans, vote for Romney-Ryan and those who share their views. If, on the other hand, you believe that strengthening the middle class and our basic completive tools is a better course, mark your ballot for the Democrats.
Ernie Wittwer, Hillpoint
Candidates Mitt Romney and Paul Ryan subscribe to trickle-down economics. In their world, job creators are the wealthiest among us. The wealthy have the money to invest. When they invest, they create jobs for the rest of us. Following this theory of job creation, Romney and Ryan would maintain all of the Bush-era tax cuts and slash the historically low tax rates even farther, giving the wealthy another huge break in taxes.
Trickle-down has three major problems. If it worked, we would not be in the current economic slump, because we have tried it over the past three decades. It has not worked. Second, it assumes capital is not available for investment. In fact, the wealthy have done very well in recent decades. They now control more of our national wealth than they have at anytime since the Gilded Age. Major corporations are sitting on huge amounts of cash. And the cost of borrowing is nearly zero. Investments are not being made because potential investors are afraid that the products and services that would be created will not be sold. Demand is weak.
President Barack Obama and Vice President Joe Biden offer a different approach. They would stimulate demand by retaining the Bush tax cuts for the middle class and even for the wealthy on income of less than $250,000. They have already implemented policies such as the payroll tax holiday that gave all working Americans a tax cut. Tax breaks for the middle- and lower-income people put dollars into the pockets of people who spend. Lower-income people spend all that is available to them just to survive. Middle-income people may have more discretion in their spending, but with more disposal income they will buy the new car or appliance or enjoy more dinners out.
Obama and Biden also suggest a broader approach to ensure that the economy is healthy in the long run. They recommend investments in our infrastructure to rebuild our highways, transit systems, electrical networks and water systems.
These investments will create jobs immediately and make our country more competitive in the future. They recognize that only a well-trained and adaptable work force will allow us to compete, so they would invest in education both for our young people and for existing workers. Finally, they understand that innovation has always been a key ingredient in America’s economic health, so they would invest in basic research.
The November election will determine which approach we follow. If you really believe putting more money into the Koch brothers’ pockets will improve the stock of all Americans, vote for Romney-Ryan and those who share their views. If, on the other hand, you believe that strengthening the middle class and our basic completive tools is a better course, mark your ballot for the Democrats.
Ernie Wittwer, Hillpoint