It's the Spending, Dummy!

Have you ever noticed that when something gets "out of whack," the more you tinker with it to get it back right, the further "out of whack" it becomes? That's what happens when the economy gets in the shape that we are seeing now.

The lawmakers and political candidates all have "fixes" for the economy. One says that we need to raise taxes for the rich while the other says that we need to extend tax cuts to stimulate investment. Proponents of increasing taxes for the wealthy think that the average person will support such increases because they see the high-earners as deserving to be taxed more. That is a very elitist attitude in itself and totally discredits the intelligence of most of the American public.

I think most folks just want our tax system to be fair -- to treat us all equally -- without special breaks for particular groups.

Those who believe the tax cuts implemented by the Bush Administration are contributing to the budget deficit are also confused. Revenue is not the issue. Spending is the issue. When you cut taxes and then increase spending substantially you are going to increase the deficit. Tax cuts stimulate market activity which in turn will generate more revenue at a lower tax rate. Those cuts must be followed however, by either holding the line or decreasing spending. Budget deficits are caused when you spend more than you bring in. It's the spending, dummy -- not the revenue side of the equation!