[quote]Bill Roberts wrote:
Where the president can have a quite substantial effect is in the expectations that businesses have for the future.
If their expectation is that the future is such that if they take the risk of investing capital and expanding their business in some way, if this is successful the profits will be taxed away anyway while if money is lost, that is money lost, then they are not so eager to expand their business.
Imagine you own, say, a few stores and are thinking of building another. Why do it if, should the store lose money, you are out the money, but if it makes money, so much of it will be taxed away that you might as well not do it?
And let’s add in expectations for the future such as being forced to buy health insurance for these employees that would be added, and learning from the CBO that their projection is that the cost of such acceptable-to-the-government insurance will be $15K/year for a family of four.
And expectations of carbon taxes and all kinds of other things.
Versus an alternate “Morning in America” expectation of reduced taxes.
Is this going to have no influence on your decisions?
And then of course there is the direct effect, on higher taxes on employers being implemented, that they now have less money to do anything with.[/quote]
Bill, I guess the point I was trying to make with my last point was that it is the ultimate balance of power that has more effect on the economy than the president himself. A democratic president with a republican majority congress(or vice verse)…good times. The children are tied up in gridlock and can do less harm.
Here is something I have been thinking about of late. Lets say that I hold the purse strings in my home. All cash comes from me. Anyone wants to make a purchase, they have to come to me, make their case and request the money. Lets say they make a good case, but the amount requested represents too much of the current budget. I like it but decide it will have to wait. Maybe we can work together and adjust our spending so that we can make room for the expenditure in the near future.
Now lets throw in a wild card. Lets say my wife, unknown to me, gets a credit card. She continues to come to me with the basics. Food, shelter, security, etc, but every now and then she sees a goody that the kids would love. They don’t need it, don’t have to have it, but it sure would be fun and sure would gain a lot of love and affection for good old mom from the kids. She decides to go ahead and put it on the credit card. She borrows the money from somewhere else, rationalizing that when things are flush in the “future” she will pay it back. It gets easier and easier until one day I wake up and realize there is a huge bill that I had not been paying attention to. Times are not flush, and I am having trouble trying to find a way to pay the interest, much less the principle on this credit card along with the basic necessities.
This is probably too basic and not well hashed out, but if our government is allowed to tax for the basic needs (education, national security, etc) and then buy love from their “children” on credit, it can only end badly.
One of Einstein’s most famous quotes was “We cannot solve our problems by using the same level of thinking with which we created them.”
A lot of our problems as a nation began when we started to figure out ways to get things we wanted without directly paying for them through our taxes. We figured out “creative” ways to finance and justify our actions. We have not moved to a higher level of thinking yet. We just keep trying to find another credit card or refinancing.
