I felt the following is a great topic regarding the current state of the markets and economy in the US... Great because it is generally looking at a "solution", and not just the "problem". A refreshing read to say the least. (Posted by Brian Tracy on Mar 25, 2009)
There is good news and bad news in our economy today. First, the bad news: We are immersed in the worst economic situation of our lifetimes. As a nation, we have been on a spending binge for decades, spending money that we have not earned on things that we could not afford, and on terms that we could not pay for, to impress people that we don’t care about that much in any case.
Now, it’s all over. As Stein’s Law says, “What can not go on indefinitely, won’t go on indefinitely.”
After several decades of affluence, Americans fell in love with the idea that they were entitled to have the highest standard of living in the world while working at half-speed, wheeling and dealing, flipping properties and generally trying to “get-rich-quick.” Now, it’s all over, and it’s not coming back. We are living in a new reality.
The good news is that the US economy is still the most entrepreneurial in the world. Americans start more businesses per capita, register more patents and copyrights, create more breakthroughs in every field, graduate more students, and are simultaneously more positive and optimistic about the future than people in any other country.
The key to reversing our negative economic situation is for the federal government to allow the business community to “take off the gloves” and begin investing, producing and creating new wealth and new jobs.
The current federal bail-outs and massive spending plans are imposing a huge financial burden on our children and grandchildren. The latest estimate is that each person in America has been saddled with an additional $48,000 in debt that they will have to pay off out of their paychecks and through their taxes in the years ahead. The tragedy is that virtually none of this big spending will do anything to stimulate job and wealth creation.
Almost every dollar has been allocated to pet programs, give-aways, earmarks, pork belly projects, and social welfare. None of the money invested in these areas will create any real jobs. And most of the spending doesn’t start until 2010 and beyond.
Government has no money. The only money government has is the money that it takes away from the private sector, and from individual taxpayers. Government creates no wealth. It merely redistributes wealth away from the people who earn it toward the government sector.
For every job that government creates, it must destroy approximately 1.4 jobs in the private sector.
Government jobs are those jobs that, by definition, nobody is willing to pay for because nobody values the results or outcome of those jobs.
Jobs in the private sector only arise when people produce products and services that people want and are willing to pay for.
The current administration seems to be obsessed with taxing the successful and productive people in America. These people are also the only real “job creators” in America. If you want to create more jobs, reward the people who create more jobs.
There is a simple solution to the current economic situation: abolish corporate income taxes. Abolish capital gains taxes. Abolish taxes on dividends.
Instead of taxing productive people so heavily that they have no money or incentives to invest and create jobs, remove these tax burdens completely.
The result would be a complete turnaround of the US stock market. Companies and their stocks would increase in value overnight. The monies lost in 401(K) plans would be largely recovered and recouped, thereby saving the retirements and dreams of millions of Americans.
Companies do not pay taxes anyway. Companies only collect taxes from their customers, or reduce the wages that they pay to their employees, and pass them on to the government.
Today, very few companies are earning any profits so eliminating taxes on those profits would cost the government almost nothing. On the other hand, it would signal to America, Americans, and the rest of the world that the US is now the most attractive country in the world to start businesses, and to invest and create wealth. The natural energy, ambition and determination of the American people can and will bring us rapidly out of this recession if entrepreneurs, businesses people, investors and wealth-creators are simply encouraged to “take off the gloves.”
Brian Tracy
(I recommend his website to any who are looking for inspirational ideas and insightful opinions: www.briantracy.com)
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