Replies

</i> Cutting basic government services is bad for business. Eliminating state jobs and state spending threatens our economic recovery.

Our economy needs the stimulus of tax dollars to keep money flowing in the economy.</i>

I thought this keynsian bs was discredited long ago. How is taking the money from people who would have spent it (based on their needs), and letting the government spend it (based on political, special interest considerations and inefficient government jobs) stimulating to the economy?

As President Bush noticed, even giving people the $300 or $600 checks over the summer was not stimulating. It's better than if the government spent it, but still not stimulating because as economists noted, people change behavior based on their expected PERMANENT income, not this temporary blip.

The only way to truly stimulate the economy is to cut the marginal tax rate (the tax rate for each additional dollar of income). This will incent people to work for that extra dollar since they get to keep more of it. Otherwise they prefer time for leisure rather than expand that extra effort. This stimulates the economy as more work (productivity) gets done, more gets produced, more income is generated and spent, more workers are hired...

Republicans need to inform the public at large of the above since our schools are obviously not doing their job. It is a more complex explanation than the usual sound bite politics. That's why it's so much easier (even though wrong) to be a liberal.

people change behavior based on their expected PERMANENT income, not this temporary blip
Ditto on that. What do you do when $300 suddenly falls in your lap? Either spend it or use it to pay off bills immediately. No long term planning involved. Plus what was the reasoning behind getting $300 vs some other amount? Its just what the government thought would be the best. No incentives involved to get more money, so people are just going to wait around till next year to see if the government throws out some more crumbs.
I think getting rid of the double taxation of dividends is a step in the right direction. That could stabilize the stock market, giving people an incentive to stay in the stock market for a longer time.