December 6, 2013
Over the past few weeks I have enjoyed the banter going on in the local newspapers about which political party best represents the interests of the poor and working class.
What is missing in all this banter is what really improves the lot of both the working class and the poor. We have seen that government handouts do not work and have not solved the problems.
We are at the highest poverty level since 1965. It is not only that the poverty level has increased. The median income of the middle class has declined by 4.9 percent since 2008. The median income level today is approximately the same as it was in 1995.
What does work to improve the lot of the middle class and the poor is economic growth? Today we are in a period of slow economic growth; the worst period since 1948. Our government does not create jobs, nor for that matter the government does not create economic growth. All a government can do is use fiscal policy to encourage job growth and economic growth.
What is governmental fiscal policy? The two primary elements of fiscal policy are taxation and spending. You can add to these two elements national debt which acts like taxation. In addition we have government regulations which many believe also acts like taxation.
Taxation, national debt, and regulations all have an adverse impact on economic growth. The economy has been slow because of the amount of taxation, national debt, and the continuous implementation of new regulations. All these have impeded the growth and expansion of our businesses the real job creators and the real economic growth generators.
Governmental spending not financed by increased taxation or national debt can and does have a beneficial impact on the economy. The problem within the United States has been government spending that is being financed by an increase in taxation and national debt. Increases in national debt will put a drag on the economy. Money that would normally be used by businesses for expansion is being gobbled up by the government to finance its spending.
Government regulation stymies economic growth because businesses have an uncertain future when the regulations are applied. Government regulations hurt small businesses more than big businesses. It has been proven over and over that small businesses are the job creators and the economy expanders. When a small business is stymied the economy fails to grow.
History has proven that economic growth raises the lot of everyone. Economic growth is like the tide and a rising tide raises all boats. Economic growth raises all and we are not growing economically.
For those who claim one party is better than the other needs to do some research. I have found that there is one party that is like a tide. It has economically raised the lot of everyone. The other party propagandizes about setting up a Utopia.
We as citizens must decide … do we want a party that has raised the lot of everyone, or do we want a party that is prophesying about a Utopia that can only be financed by forced extractions from those who have worked the hardest then giving those forced extractions to those who are less fortunate because they failed to use their God-given abilities.