DEMOCRATS by and large believe that they can reduce unemployment through the “Keynesian Economic Theory” which basically states that the government can increase growth and employment by increased investment in government spending on public works. (i.e. road building, other infrastructure projects, etc…) They also believe in “increased unemployment benefits” to give the unemployed money which they will then spend in the economy, thereby adding to demand and fueling economic growth.
However this all requires the government to tax the money from the private sector, taking away the very capital needed by businesses to expand themselves and the economy. This naturally means that they will have to hire more people to keep up with increased demand. The government does not increase any TRUE economic growth with any of its spending. The government does not pay taxes and does not produce anything to make money. ANY dollar that the government receives HAS to come from the people. It does not even come from companies. When people talk about corporate taxes, there really is no such thing. Corporations do NOT pay taxes. Corporations are owned by PEOPLE (either the small business owner or the shareholders of the corporation). So every dollar that the corporations are required to pay to the government comes directly out of the people who own its pocket. In the end this does not just affect rich people. It affects all people who have investment accounts, 401ks, IRA, mutual funds, etc because it’s their money being sucked off and handed over to the government.
REPUBLICANS want to reduce taxes, or keep them low, so that the individuals and businesses can use their money to grow the economy and therefore create jobs. By increasing taxes in a recession, or any time for that matter, is counter productive to actual beneficial job creation.
Democrats argue that Republicans only want to increase the taxes on the top 2-3% of taxpayers, but of that top percent are the very small business owners that are responsible for over 50% of job creators in the country. They are not the small mom and pop shops. So by taxing them the government is taking away the very money that they need and would use to hire more people. Republicans say: leave the money in the economy and with the people/businesses pockets other wise we will have further unemployment for a much longer time.
I thought it was very helpful to show the differing views of Democrats and Republicans on the issue of unemployment. Both plans have their pros and cons, but I just don’t know if either plan alone is enough to help. The Democrats' plan seems to revolve around more government spending, and in this time period when the national deficit is already too high, I just don't think this is the solution people have been hoping for. However, I have read that the Democrats want to introduce public service jobs, much like FDR did during the Great Depression. One of the proposed projects deals with looking into alternative forms of energy which would basically kill two birds with one stone, as employment would increase and new energy sources can be researched. I do like the Republican plan to tax less, this way more people can spend and pump money into the economy. However, I am worried they will not help out smaller businesses, and just give tax breaks to larger corporations. Right now I would recommend for our government to introduce public service jobs and give tax breaks to all American businesses, big or small.
ReplyDeleteI too agree with Mr. Cash in thinking that it was a very good idea to show both sides of the argument. It allows people to understand defferent points of views and make their own opinion on where they stand. I also like the Republican stand on the issue. I do not know very much about all the lagistics on how raising and lowering money will work but it sounds like it will be easier on the people. The economy is in a terrible situation right now and it is only getting worse. The government needs to decide on an plan and put it into action so that the economy can start to grow again. The effects this economy has had on the people has also effected me and my family and i do not want to get out of college and look for a job in places where there are none. I hope when I enter the job search the economy will be better and the government will be helping it stay that way.
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