the income tax for the higher brackets should not be cut, that would just take money that could be used for welfare/schools/health and transfer it to people so that they can now afford their third beach house. The lowest brackets though, seem like a reasonable idea to lower (or perhaps increase the threshold). Particularly given that the lowest bracket (in America) I think starts at $0. The main problem with the economy being in poor shape is that these people in the lowest brackets are the ones that are suffering, and the ones in the upper bracket sure are not. The military should be cut, this should be more doable with the withdrawl from Iraq. Science is an investment, it is expected that it will make significant returns/benefits in the future (think of what ARPANET the internet did to economics).
Well obviously we can only cut taxes that are present. Sales/VAT taxes are effectively flat taxes that places more burdon on the poor (since the money is worth more to them, to eat etc) so cutting this may not be a bad idea. capital gains tax have been decreased several times and do not appear to have correlated with economic growth
The income tax being cut for all tax brackets frees up more resources for private investment, which can help soften the blow. It's also worth noting that quite often the people who are at the top brackets don't necessarily make that much money in the first place, whereas those who aren't can still be absurdly rich. For example, the established rich (the kind who would actually be buying their third summer home) would have most of their wealth in assets, not income, and would pay quite a bit less in income tax regardless of what the highest brackets paid. Inversely, someone who actually works their ass off to make their money, or actively runs an innovative business, gets taxed quite a bit more.
Science certainly is an investment, but the government has a tendency to crowd out the competition, and its most useful inventions have a tendency to be outlandishly expensive for what they're worth (eg. most of the innovations coming out of the DoD).
EDIT: Oh dear, I forgot to address Capital Gains. Well, the main point here is that, again, tax cuts in of themselves won't really help the economy or unemployment with the possible exception of the employer's side of the payroll tax. The main issues of a standard recession can be traced to a mixture of (enforced) wage rigidity and distortions in the capital structure, neither of which are really solved by tax cuts. However, Capital Gains tax cuts in particular incentivize investment, which leads to saving, which leads to sustainable production, which strengthens the economy in general. This is over a long term, but it certainly helps.
The governmnent has fluctuated in and out of debt/surpluss since many of these programs have been created. They seem quite possible to fund for the long run, with responsible and non-ideology based policies (eg avoiding the Laffer Curve, a gigantic oversimplification of a complex system).
Many european countries have managed to sustain significantly larger government programs (especially in regards to welfare ahd universal education). (I am using the non-broke countries as an example here, of course. The cause of the other countries debt is often placed on mishandling/corruption of managing the economy *cough*Greece*cough* and is a different discussion).
With the exception of Germany, I actually can't think of any European countries that have sustained their government programs without causing huge economic imbalances (France), running up massive debt (Italy, Spain, the UK, etc), or recession followed by major reforms (Sweden). Even Germany's debt has shot up rather dramatically over the years, and they're easily the strongest economy in Europe.
Also, a lot of American welfare is distinctly different from European welfare. For example, Medicare and Medicaid, taking up a gigantic portion of US spending, were originally attempts by the US government to make healthcare more affordable to the groups they're aimed at, and we can see today how successful THAT was. Most European countries don't have such a program at all for rather obvious reasons. The other major expensive American welfare project is Social Security, which European countries DO have in the form of pensions. However, aforementioned pensions are generally kept afloat by raising the age limit at which they can be received or reducing payouts, in short, screwing over the elderly who paid into them.
On that note, I've never understood the rationale behind Social Security. You can't opt out, even these days in the US it doesn't pay out much more than any other pension, and in the long term necessitates screwing over either the young (by forcing them to pay huge amounts of money for a benefit they'll likely never receive) or the elderly (by taking away the benefits that they actually did pay for).
yes, it would stop the Fedeal Reserve from messing with things, but damn this would fracture the economy. Imagine not being able to pay a supplier, becuase they use a different currency. The supplier has to change currency to another one to pay the manufacturer. The shop that sells stuff after all this only accepts some form of money and not others, so you have to change the currency there. Not to forget international trade. Which countries will work with what currencies?
Having many types of currencies would make a confusing mess of the economic system.
It would also seem likely that large manufactures would all default onto one currency anyway to reduce this (particularly in regard to international trade). That would influence wholesalers etc to do the same thing, resulting in one mostly dominant currency. Now the owner/printer of that currency has the same, if not more power, than the Federal Reserve had, accomplishing nothing.
I don't think many economist's would support this idea...
Most currencies would end up being backed by different things, but I'd imagine a lot would just revert to a gold standard of some kind. In turn, conversion would be simple, straightforward, and rejection of currency unlikely. If one of the major producers began cutting its reserves back too much, or inflating heavily, pulling out would be fairly simple and the overall effects on the economy wouldn't be as harsh. On the other hand, when the Fed does such things, Americans are basically stuck with the consequences of whatever boneheaded policy they implement without many alternatives.
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Topic: American Election Megathread - It's Over (Read 763922 times)