There seem to be a lot of people who think that cutting taxes will somehow miraculously get us out of our un-balanceed budget and create jobs.
Going back to my blog of a couple of days ago when I tried to equate the way I operate my budget with the way the USA operates it's budget.
One of the things That I pointed out is if I run short of money I borrow from savings (USA can't do that as it has none) OR I borrow from a bank, and pay it back as quickly as possible to reduce the interest I pay. (The USA borrows but does not pay back the loan) The third option was to get another job, to generate more income. This works for me. (The equivalent for the USA is to collect more taxes - for some reason they don't want to do this) The fourth option, for the USA, is to cut taxes! The equivalent for me would be to cut my income! Drop my extra job? Ask my employer to cut my pay? Now, can ANYONE explain to me how this would help me with my "Balance of payments"? How would it help me to pay my bills? How would it help me to pay off my loan?
(In case someone says that by cutting taxes to the rich - most of who pay hardly any tax compared to the average American - they, the rich, will create jobs, I have to ask, "Are you mad?" If they would create jobs, HOW, why are they not creating jobs?? Their tax rate is the LOWEST that it has been in at least 60 years. With such a low tax rate - the lowest the USA has had in 60 years, AND the lowest in the WORLD - WHY are they not creating jobs?? As the rate of job creation is the lowest in 60 years and the tax rate is the lowest in 60 years, common sense says that by lowering taxes we will lower the rate of creating jobs. At every point in the last 60 years our tax rate has been higher and our job creation rate has been higher! Reagan 50% top tax rate, Nixon 70% top tax rate, Eisenhower 91% top tax rate. And in every instance higher job creation rate. I say, raise the tax rate on the rich. - and thus create jobs!)