Chad Stigall
Econ 100
Economic Policy
The new economic policy of the united states should
include cutting taxes, reducing governmental waste, and
balance the budget by having a smaller more efficient
federal government. It should include equal opportunity for
financial security but not through a government sponsored
redistribution of wealth program.
Cutting taxes across the board including income tax
rates, capital gains and estate taxes among others should
provide a growth spurt for the economy. Allowing people and
businesses to keep more of their hard earned money would
enable them to spend more money. People would be able to
buy more cars, refrigerators, homes etc. The businesses
would be able to build new factories with better more
efficient high tech equipment. These new factories and
expanded businesses would employee more highly paid workers
which would expand the tax base and allow us to be more
competitive in the world marketplace.
Reducing the taxes would also motivate people to work
harder and save more. The way things are now people can not
seem to get ahead no matter how hard they work. The harder
they work the more the government takes while others who
choose not to work hard or have not developed the skills to
earn a decent wage reap the same and in many cases more
benefits. For example student loans and grants for college
board and tuition fees are largely unavailable to lower
middle class families let alone middle and upper middle
class people. Reducing taxes on businesses would also allow
them to invert more on new product development and research
which in many instances the federal government now
subsidizes which requires management. This government
management bureaucracy cost tax payers money and is
unnecessary because free market demands and the extra money
they would save from tax cuts would motivate businesses to
fund these programs themselves. This is just an example of
what a smaller more efficient federal government. "Citizens
in the united states today pay 38.2 percent of there income
in taxes every year" (RNC Talking Points). This is way to
much money for Americans to be paying. "Cutting everyone's
taxes by 15 percent and giving them a 500 dollar per child
tax credit would cut a typical families tax bill in half,
allowing them to keep an average of $1,600 more of its hard-
earned money"(RNC Talking Points).
The question is often asked as it was in the recent
presidential election, how can we balance the budget and
have significant tax cuts? There are several ways in which
the government can cut taxes while maintaining worthwhile
government subsidized programs, which will be discussed in
this paper.
To have funded tax cuts the government will have to
cut spending by eliminating waste and by reforming while
preserving needed entitlement programs such as Welfare,
Social Security and Medicare though slowing the rate of
growth in spending on them. As quoted in a Business Week
editorial "Cutting the growth in Medicare spending by $150
billion would help open the way for a truly balanced budget,
lower interest rates and higher economic growth" (A Vote for
a Sensible Center 194).
To eliminate waste the government will have to cut
programs that are no longer needed and programs that overlap
each other. "The federal government today has 163 separate
job training programs, 26 food programs and 180 educational
programs. The government needs to eliminate some,
consolidate some and change others" (The Balance Sheet).
The government can also cut waste by cutting the amount of
money that some of the governmental agencies receive for
example the "Republicans want to cut funding for the
Commerce Department and the department of Urban Development
budget by $715 million, Foreign Aid by 11.5 percent, Defense
budget by $6 billion and the congresses budget by $205
million" (The Balance Sheet). They can also reduce waste by
spending money more wisely which can be accomplished by
reforming some of the government agencies such as welfare,
Social Security and Head Start. One proposal inparticular
seems fair and powerful "New York senator Daniel Patrick
Moynihan has been pushing for several years- a recalculation
of the consumer price index so that it no longer triggers a
higher-than-necessary cost of living adjustment in Social
Security checks and other entitlement. That fix along with
companion reduction in other programs tied to the consumer
price index would save $1 trillion over the next twelve
years" (A Very Good Place to Start 70).
By reducing waste the government will be able to
increase funding for programs that are needed, and put our
hard earned tax dollars to good use. There are many
programs that need to be increased, the first is Social
Security because our senior citizens need money to live on
when they retire. Second is