Rooted in Reason: Nurturing the Seeds of Liberty

Economic Policy: Business v. Government by grassroothawaii
December 8, 2010, 1:55 pm
Filed under: Economy | Tags: , , ,

By Frances Nuar

President Obama and the Republicans have (miraculously) come to an agreement on the tax package they have been aggressively debating for the last few weeks. As it stands, the final bill will “extend the Bush-era income tax cuts for two years, reduce worker payroll taxes for one year and give more favorable treatment to business investments, as well as extend unemployment benefits.”

Many Democrats are very upset over the compromise, touting it as a concession to the “uber-wealthy”, as tax cuts will be extended for even those making over $250,000. This begs the question: is it business or government that “stimulates” the economy? Does raising taxes as a blanket policy, on the rich or otherwise, help reduce the deficit? A study “found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending.” I say no, it is business that stimulates the economy.

History shows that it is that very same rich who are the producers and job-creators in society. Even Obama’s own economic adviser Larry Summers says this tax package will support economic growth. Isn’t that what we all want?

Economists are praising the package because it is good economic policy, i.e., good for our economy in both the short and long term, it will create jobs and increase consumer spending. Even left-leaning policy experts said the package did more to create jobs than they had thought possible.

So who is right? Should the government control the economy, or should the market play out according to consumer supply and demand as determined by business, big and small? The government should protect one’s right to do business, not punish someone for working hard and becoming successful. Business is what drives economies, and I think it’s time Democrats embraced the change that has finally come to the White House.


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