To the contrary, lower taxes have always stimulated growth. The problem is that the time between cause and effect averages about 6 years. Normally by the time the effect begins to be felt, a new administration comes in and changes the rules. Those new rules run the same 6 year course before their effects begin to be felt.
How much of every dollar earned in America is absorbed in taxation? Federal income tax, state income taxes, sales taxes, property taxes, taxes on earned interest, gasoline tax, heating oil tax, electricity and phone taxes and surcharges, and these are just the ones that individuals most pay, and are chicken feed compared to what businesses must pay. Add to that the various kinds of insurance which we are in many cases required by law or necessity. How much do individuals have left to spend on themselves? How much do businesses have left to spend on growth, payroll, or benefits?
If the government were responsible stewards of our money, using it sensibly, I wouldn't grudge them their tax money. But, it seems for every dollar the government collects in taxes, it spends 5.
The basis of our current problem lies with our tax system, and it's manipulation by our elected officials. Have you ever wondered by the US tax code is as large as it is? It is so large that few people can even hazard a guess at how many pages or regulations in contains. The number varies between 60,000 and 80,000, depending on which politician you ask.
Do you know why the tax code is so long and so complicated? It is because it is the tool used by elected officials to exercise their power. It is through tax breaks that politicians reward large donors. Countless loopholes exist in the tax code for this purpose, and parties on both sides are equally responsible. It is by manipulating the tax code that our "leaders" keep themselves in office.
The Federal Reserve has kept interest rates artificially low for decades, in order to make credit more affordable, and thereby increase growth. As a result of this cheap credit, companies (and consumers) got into the habit of borrowing as a regular habit.
The Federal Government also introduced an Equal Lending Practices act, which made it easier for people with marginal or poor credit history to receive credit. I was amazed to see people who couldn't qualify for a Target store credit card getting approved for 6 figure mortgages.
Large mortgage lenders spent lots of money supporting the campaigns of politicians, and changes in banking rules allowed for the selling of mortgages (regardless of their relative amounts of risk) as securities on the open market. With real estate values appreciating at many times the rate of inflation, it was a recipe for disaster.
Who is to blame for all this mess? People deserve some of the blame, if you are earning only $2000 a month, you shouldn't be buying a house with an ARM which will increase your payment to $1500-a-month after 4 years, and carrying $10k or more in credit card debt is no one's definition of wise. The banks deserve some of the blame, they were the ones who were handing out the money, with few questions asked. But the ones who deserve the most blame are the politicians in Washington, the ones who manipulated the rules enough to make this disaster possible.
The sad thing is that people in America don't really seem to see past their own noses. They don't care about which direction their country is heading until their own noses hit the wall. They keep electing the same politicians every 4 or 6 years without bothering to actually see what these prostitutes are actually doing with the power given to them. Doesn't anyone wonder why a politician will spend millions of dollars on a political campaign for a job which pays $200k per year? Come on people! This isn't rocket science!
Has anyone here bothered to look and see who in government is responsible for what? We are all upset about the problems with our banking system, but can anyone here name the chairs of the house and senate banking committees? Anyone?
Can anyone here name both their state senators and the various congressmen from the districts where they live? Let alone read what legislation these "lawmakers" have passed? Anyone?
If you don't know the complete answers to these questions, then you, personally, are partially responsible for the problems which you and America are experiencing right now.
The midterm elections are less than a year away. If you want to do something about where the country is going instead of complaining about it here, then register to vote, if you haven't already. And then exercise your vote. It is the only voice you really have.
