Short Sighted Economics

Economics was not my best class - but I did pass the course in College. As President Bush plans to give more tax money back to individuals and business to jump start the economy, I can't help but think this is the wrong approach - again. True, it may help in the short term - like it did the last time - but it will make the long term situation worse. In fact we are in this situation again because it didn't work the first time. Let me use an analogy to help explain how I see it.

If I carry a large credit card balance then I am subject to monthly fees for interest on the money I owe. Sometimes, usually during the holidays, my credit card company might offer to let me skip a payment. Woo-hoo! Now I have more money to spend. But the trick is that the interest doesn't stop for that month and now I owe more because I spent more and I still have to pay the interest for another extra month.

Part of the reason the USA is having economic difficulties is because we have a HUGE trade deficit. This means that we owe other countries WAY more than they owe us and we pay interest on those loans. The money we use to pay those debts comes mostly from the taxpayers - especially if we are not generating interest on our own loans because we have a deficit. If we give money back to the people, we make our debt worse. True we might spend that money quickly and make it appear the economy is doing better but after a very short time we will realize we now owe MORE money and we still have to pay interest on all of that. And so we slip ever further into economic demise. I do understand that trade deficits may not be directly related to tax revenues - but all of it is connected.

No one likes taxes but that is the primary source of money our Government generates. If we keep cutting taxes, or giving money back, how will we ever pay our bills? It helps to win elections to say "no new taxes!" but unfortunately people don't realize what that means in the long term. What they should be saying is "Less taxes for the poor and more for the wealthy!" In fact, I believe if the Bush Admin. were to increase a large business tax or a personal wealthy tax, they would make real progress for long term economic growth - as long as those business and wealthy individuals didn't pass those costs on to the poor as they usually do.

The economy of a country is not something you can quickly jolt around. So, even though I could seriously use an extra $800.00 right now, I'd rather have a long term solution that would provide a break on gas prices, lower cost of food, and energy costs. Those types of savings would add up very quickly to more than $800.00 and would be enjoyed by all.