Econ 101

People have been so misled for so long that they have no clue as to what is necessary to grow and feed a prosperous economy. Economics is not magical. It is not even complicated. The only model one needs to keep in mind right now is that the more wealth gets concentrated with a few, the more America’s economy will come to resemble that of Mexico or Brazil than that of what once was America. America was created by high wages enabled through investment in efficiency and shared with workers rather than hoarded by executives.

 

An example: A guy owns a widget factory. There is stable market in widgets.The government gives him bunch of money through tax cuts. What incentive does he have to increase the number of widgets he makes? None! If he increases the number of widgets in the market it will drive the price down, and may drive him out of business. What happens when the government gives a tax break to the bottom of the earners? They will spend the money! There is now an increase in the demand for widgets, and the price goes up. Now the owner of the widget factory sees that he can make more money by making more widgets. He puts his employees on overtime. They have more money and they spend it. The economy needs to make more cars, clothes, eat out; etc. The rising tide raises all the boats. The GOP keeps talking about how Kennedy cut the taxes to stimulate the economy, and that was true but his tax cuts were demand side tax cuts, which worked. If you want to simulate the economy with taxes give ALL the breaks to the bottom. The rich will take care of themselves, they always have and they always will. Money in the hands of regular folks is the foundation of an economy. Without it, all the investment in the world will not create an economy.

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