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How to Fix the Economy: A Lesson in One Lesson
So here is what I posted on Facebook earlier after catching up on the debt issue. I was already vaguely in touch with it before today, however, after research, there seems a pretty simple answer to me.
Below is what I posted. It's pretty simple, I think. If i'm not clear, just comment and I'll try to clear myself up
Well, it's like this. the obvious short term answer is that the debt cap must be raised in order to continue debt payment as agreed upon in the Social Security Act, as well as the subsets of Medicaid and Medicare. However, this would, long term, destroy the economy. It has been the position of the Republican party that there must be long term reductions in federal spending that would be greater than the debt extension. That is to say, if we increase the debt cap by 2 trillion, which is currently the expected necessary figure, then there must be more than 2 trillion in cuts over the next few year.
The problem is, how do we go about doing this without creating a situation where taxes are raised, which the Republican party is strongly against, (and we are already paying a substantial portion of our wages to taxation) and where government given services are not greatly reduced, (which the Democtatic party is strongly against.)
The answer, then, lies in long term debt reconstruction so as to encourage long term dollar benefits while encouraging private sector development at a stagnant taxation rate while creating long term welfare reducing need. Think of it like this, if we continue with our current level of taxation while paying out the same amount we are now, we'll go broke. We're paying more than we are taking in. So, we must either cut some of our expenditures or raise what we are taking in. So, since neither party is willing to allow one or the other, how can we get around this?
Since our debt is something traded among foreign investors, we can raise the value of our dollar if we get around this debt cap limit. Therefore, if we can set out a long term plan for paying off our debt, we will gain a slight foot hold in the dollar. Because of this, a long term plan must be outlined.
This plan should be as follows: encourage private sector growth by providing tax incentives to businesses that grow a certain percentage over a number of years. Keep it as low as a minor reduction in taxes paid in two years if the company develops 5-7%, meaning that, while the business grows and, through sales, encourages spending and therefore raises the value of the dollar, businesses will also have raised incentive to grow, leading to a reduction in the need. On a large enough scale, if we encourage private businesses to grow, employment raises, reducing the need for welfare. When welfare is reduced, money taken in from taxes can go to pay off our debt, proving to the world that America is capable of paying off its debt, and increasing the value of the dollar as investors see american debt as something that will be repaid.
In short, if we provide tax cuts to businesses that show growth and provide greater tax cuts to businesses that show greater growth, America will see a rise in production, which is the building block of value. Since the dollar is an indicator of the value of production, the more that is produced, the greater value of the dollar, and the greater the value of the dollar, the stronger the economy becomes. The stronger the economy becomes, the better able the nation is to pay off debt, and again, our currency gains respectability, and in turn it gains value.
Now, it is true that temporarily these tax cuts can't go into effect. It would have to be something promised to be revealed in a number of years, as the immediate future requires our stagnant taxation to pay off our debt. And the debt cap will have to be increased in order to not fold imminently, allowing the long term plan to become effective. And it is also true that this burdens the private sector with the development of the economy, but since money is only worth something when production occurs, and the private sector is where production occurs, the economy already relies heavily, if not entirely, on the private sector. Over time, as need is reduced through job placement, reduction of welfare need and the eventual reduction in welfare spending, the government could, COULD, pay off our entire debt, creating a situation where american could be strong again. Economically and internationally, I mean.
So there you have it. Like balancing your checkbook. Figure out what needs to be reduced, do so over time with borrowed money, establish a way to reduce your expenses while keeping your income steady, and once you get to the point where your income is covering more than your expenses, start paying off your debt.
Below is what I posted. It's pretty simple, I think. If i'm not clear, just comment and I'll try to clear myself up
Well, it's like this. the obvious short term answer is that the debt cap must be raised in order to continue debt payment as agreed upon in the Social Security Act, as well as the subsets of Medicaid and Medicare. However, this would, long term, destroy the economy. It has been the position of the Republican party that there must be long term reductions in federal spending that would be greater than the debt extension. That is to say, if we increase the debt cap by 2 trillion, which is currently the expected necessary figure, then there must be more than 2 trillion in cuts over the next few year.
The problem is, how do we go about doing this without creating a situation where taxes are raised, which the Republican party is strongly against, (and we are already paying a substantial portion of our wages to taxation) and where government given services are not greatly reduced, (which the Democtatic party is strongly against.)
The answer, then, lies in long term debt reconstruction so as to encourage long term dollar benefits while encouraging private sector development at a stagnant taxation rate while creating long term welfare reducing need. Think of it like this, if we continue with our current level of taxation while paying out the same amount we are now, we'll go broke. We're paying more than we are taking in. So, we must either cut some of our expenditures or raise what we are taking in. So, since neither party is willing to allow one or the other, how can we get around this?
Since our debt is something traded among foreign investors, we can raise the value of our dollar if we get around this debt cap limit. Therefore, if we can set out a long term plan for paying off our debt, we will gain a slight foot hold in the dollar. Because of this, a long term plan must be outlined.
This plan should be as follows: encourage private sector growth by providing tax incentives to businesses that grow a certain percentage over a number of years. Keep it as low as a minor reduction in taxes paid in two years if the company develops 5-7%, meaning that, while the business grows and, through sales, encourages spending and therefore raises the value of the dollar, businesses will also have raised incentive to grow, leading to a reduction in the need. On a large enough scale, if we encourage private businesses to grow, employment raises, reducing the need for welfare. When welfare is reduced, money taken in from taxes can go to pay off our debt, proving to the world that America is capable of paying off its debt, and increasing the value of the dollar as investors see american debt as something that will be repaid.
In short, if we provide tax cuts to businesses that show growth and provide greater tax cuts to businesses that show greater growth, America will see a rise in production, which is the building block of value. Since the dollar is an indicator of the value of production, the more that is produced, the greater value of the dollar, and the greater the value of the dollar, the stronger the economy becomes. The stronger the economy becomes, the better able the nation is to pay off debt, and again, our currency gains respectability, and in turn it gains value.
Now, it is true that temporarily these tax cuts can't go into effect. It would have to be something promised to be revealed in a number of years, as the immediate future requires our stagnant taxation to pay off our debt. And the debt cap will have to be increased in order to not fold imminently, allowing the long term plan to become effective. And it is also true that this burdens the private sector with the development of the economy, but since money is only worth something when production occurs, and the private sector is where production occurs, the economy already relies heavily, if not entirely, on the private sector. Over time, as need is reduced through job placement, reduction of welfare need and the eventual reduction in welfare spending, the government could, COULD, pay off our entire debt, creating a situation where american could be strong again. Economically and internationally, I mean.
So there you have it. Like balancing your checkbook. Figure out what needs to be reduced, do so over time with borrowed money, establish a way to reduce your expenses while keeping your income steady, and once you get to the point where your income is covering more than your expenses, start paying off your debt.
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