Economic stimulus: subsidize the consumer or the business owner?
Published: Tuesday, October 23, 2012
Updated: Tuesday, October 23, 2012 21:10
Let’s face it, your precious President Barack Obama was destroyed in the first presidential debate at the University of Denver. Mitt Romney’s aggressive demeanor and contrasting economic plan brought back some momentum to his presidential candidacy, all while making Obama look like a spineless fool–priceless. But really, who has the better economic and job stimulus plan?
First off, the president’s basic premise of spending extensive amounts of money to get us out of a debt-hole seems ridiculous from the start.
Mitt Romney states seven items that he plans to improve on: tax, regulation, trade, labor, human capital, and spending. Flatter taxes across the board simplifies the process of taxation and, more importantly from an economic perspective, offers more efficiency in collecting revenue for the government, which in our current trillion-dollar deficit we really need.
Deregulation in business means there will be fewer rules that businesses have to follow. This is a tricky fine line because Americans would benefit from businesses having to deal with less regulatory conditions that obstruct or slow them down in growing, and thus in hiring more.
Finally, opening the American marketplace and making it a more enticing location to do business encourages foreign investors to invest in America and American workers, all helping us get the unemployment rate down, as well as concurrently slowing down the deficit. But these aren’t new ideas. These are basic rules of neoliberal economics. It’s how effectively you implement them that determines if you screw them up.
Assuming Romney sticks to his word, capping spending at 20 percent of the GDP, improving efficiency, and giving states more power to improve themselves without federal micromanagement would be outstanding.
But repealing laws such as the Davis-Bacon act, aligning federal employee compensation to the private sector, and insistently promoting a 20 percent tax cut across the board smells like a recipe for disaster. The government needs revenue to pay for the cost of running the country. Over 10 years this loss in revenue incurs a cost of over $5 trillion to the U.S. deficit. When asked how he plans to make up the loss in revenue, he simply implies he has a super-secret-awesome plan, but never details exactly what it is.
Overall, the population at large has an obligation to educate itself about what is happening. You have an obligation to not let the government make decisions without your voice being heard. Stop sending your kids to college for liberal arts, and maybe send them to get an economics degree. Maybe then you wouldn’t be crying that no one wants to hire you after you graduate, and you would understand that in order to succeed you have to compete.