ECONOMIC POLICIES Essay Research Paper Chad StigallEcon

ECONOMIC POLICIES Essay, Research Paper

Chad Stigall

Econ 100

11/26/96

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 Medicare because its important

to the health care of our seniors. Third, Student Loans

because young people need higher education to get good jobs

and compete with the rest of the world. Fourth is Law

enforcement, law enforcement is an essential part of modern

society. Fifth, Medical research And Health to make life

better and find cures to deadly diseases. Sixth the Job

Training because it helps to get people job which reduces

the number of people on welfare. Next, Food and Nutrition

will help women, infant and children program (WIC), and the

school lunch program. Last the National Parks we need to

save the wonders of our beautiful country.

The Republican national committee says “the government

needs to pass a balance the budget amendment to the

constitution ensuring that the federal budget stays balanced

and that Washington no longer continue to pile more and more

debt on our children and grandchildren, mortgaging their

future” (RNC Talking Points 1). At one time our country had

a very small debt and “no other currency on earth was as

‘Sound As The Dollar’” (The National Debt 1). Now the

national debt is five trillion dollars and climbing and the

dollar is not nearly as strong. To keep inflation and

interest rates from rising the government needs to balance

the budget; “As seen during the Carter presidency when

inflation skyrocketed and interest rates hovered near 20%”

(The National Debt 2). If the inflation increases and

interest rates rises it will slow the economy down because

no one will be able to afford to buy anything or barrow

money.

Cutting taxes across the board will not just give

people more money but will benefit the economy. By cutting

taxes citizens as well as business will be able to keep more

of their money they worked so hard to get. By cutting taxes

this will also allow people to buy things that they can not

afford now because taxes are so high. The business will not

only have more money from tax cuts but they will have more

money from citizens buying more highly priced items. With

this money the business will be able to invest in building

new factories and new products, which will in turn make more

high paying jobs for the for the hard working American

people. By cutting governmental waste they will be able to

spend more on the entitlement programs that are truly

needed. Cutting waste will also ease the task of Balancing

the budget which will ensure that the debt does not continue

to grow at an unsubstainable rate. Balancing the budget will

help ensure that inflation and interest rates remain at an

affordable rate.

Kramer, Micheal. “A Very Good Place to Start.” Time 18

Nov. 1996: 70.

“Review and Outlook Dole and Taxes.” The Wall Street

Journal 29 July 1996: A12

Sepp, Peter J. “Are Republicans Serious About Cutting

Fat?” New York Times 30 Aug. 1995: A17

“Dole Hopes Tax-Cut Move Will Energize His Campaign, but

Which taxes to Cut?” The Wall Street Journal 15

may 1996: A16

“A Vote for a Sensible Center.” Business Week 18 Nov.

1996: 194

“The National Debt. It’s Eating Us Alive!” Internet

http://www.europa.com/~blugene/deficit/debt.html

“The Balance Sheet — August 11, 1995.” Internet

http://www.rnc.ogr/news/balance/bal-950815.html

“RNC Talking Points Cutting Taxes and Balancing the Budget

Bill Clinton’s Dirty Little Secret: A $64 Billion Tax

Increase” Internet

http://www.rnc.org/news/talking/tp-960913.html