Tax cut observation ........
 

Ever notice the first step when the economy stumbles is a tax cut to stimulate the economy?

Following this logic always brings the question ... Why in the hell aren't we always looking for ways to DECREASE government spending instead of constant new programs, entitlements, aid packages, etc ?

Because youve had bush as a president.

The idea of cutting taxes during a recession was popularized by John Maynard Keynes after his study of what went wrong during the Great Depression. He also advocated INCREASING government spending during a recession (increasing effective demand). Either way more money gets into the consumer's hands. Check out "The General Theory of Employment Interest and Money".

If you are interested in the opposing view check out the Austrian School of Economics (Mises, Hayek).

Both sides have their logic.

The real reason is because 90% of the spending is mandated by law.

That's right we're a welfare state now !

The reason tax cuts help the economy is they get spent and taxed several times if given to the consumers to spend. When the Gov't spends the money it gets spent once and most isn't taxed again.

What he said.

Only republicans talk about cutting taxes to boost economic growth.
Don't confuse using tax rebates as a short term stimulus with "cutting taxes" to "boost growth"

1% of the federal budget goes to welfare.

thanks for the info .......

1% too much :2 cents:

and I'm not sure your 1% claim is accurate:

"The cost of these programs has increased from 0.8% of GDP in 1962 (before Medicaid) to 2.7% of GDP in 2006, or by 1.9% of GDP. If we exclude Medicaid, health care for children and veterans pensions it is 0.89 % of GDP, or $117 billion. (The numbers for the excluded items are found in Table 8.5, page 142). This represents approximately 7.5% of total non-Social Security receipts to the Federal Government."

http://polecolaw.newsvine.com/_news/...s-welfare-cost

Do not worry the average citizen has been brainwashed and actually thinks that getting a tax refund at the end of the year is also a great thing too.

Democrats often advocate a middle class tax cut as a stimulus.

EXAMPLE
"Four months ago I said it was time to put a middle-class tax cut worth $1000 per family into the pockets of workers who deserve it," Obama said. "A tax cut that would eliminate income taxes for seniors who make under $50,000. We can’t wait for the next president to act. We need that middle-class tax cut now more than ever – not five months from now or five weeks from now, but now."

Same people that think a 6% mortgage and 3% long-term home appreciation is a great investment. In reality, people just aren't very good at saving and their home eventually becomes their biggest net asset by default.