Consider how fiscal policies affect economy
Our national debt keeps spiraling upward, which should be of serious concern to every American. We are fast approaching that time when the cost of paying the interest on our debt is greater than any other expenditure in our annual budget. And, as might be expected in an election year, we are being subjected to an often misleading and innaccurate picture that is supposed to solve that problem.
We need to consider carefully what we are being told and the implication of the proposals being offered.
President Biden has stated that he’ll reduce the budget deficit by $10 trillion via increasing corporate taxes.
The problem with that idea is that, as many economists will tell you, the result will be that corporations will pass that increase along to consumers, look for ways to cut labor costs or absorb the increase and reduce earnings and their stock price affecting pension plans, IRAs and personal savings plans. Lower earnings would discourage capital spending and ,therefore, the need for more labor.
How about reducing government spending and the size of the bureaucracy which keeps growing in Washington? How about getting rid of the “fat” and wasteful projects buried in legislation that we never hear about and intended to help incumbents get reelected? How about cutting back on the number of government employees being added? One of the largest increases in employment in the past year was in government employees. And, while we hear great things about how the rate of inflation has come down to about 3.5%, we should recognize that is compared with something in the area of 7% from a year ago and since one year ago, prices are up in the 10.5% range. No wonder families are hurting. And what caused this problem? Many experts point to the enormous government spending initiated by the Biden Administration which put so much cash into the private sector. We are also being told that Biden policies have already reduced our deficit by $10 trillion. If so, why doesn’t that show up in the actual deficit numbers?
So, the lesson in this for all voters is to consider very carefully these or any of the financial claims being proposed and how they could affect our country.
James E. Robinson
Arlington Heights