The Stimulus Package

[Professor S]

Originally Posted by TheGame

I agree with Jonbo, I still don't buy it. There has to be more factors that cause the numbers to appear that way. I don't think taking $5 more from every working person in america is going to bring down revenue. Nor do I think allowing people to keep $5 more of their check will bring revenue up.

But there's something more to it, take into consideration how the value of the american dollar has changed in the last 10 years, and the population. Is the slant of the GDP rising more steep then the one of the value of our money going down? Did higher tax cuts for the rich people really create more jobs in the last 6 years?

In saying there is more to it, absolutely. Economics is terribly complicated, but I think it's very hard to ignore the numbers the CBO put together especially when they are from such a robust and lengthy sample.

As for inflation, the numbers use a percentage of revenue compared to GD(N)P, which I believe makes inflation irrelevant in this context. If we were comparing hard numbers, then I would agree adjustments would need to be made to acount for inflation. Even if there are adjustments that need to be made, those numbers are still impossible to ignore, IMO.

As for unemployment, for the majority of the last 6 years we enjoyed historically low unemloyment numbers which I think can be very much attributed to letting those that create jobs keep the revenue they need to generate them. As for the crash, that has more to do with unethical behavior and unrealistic home buying regulations than with the tax rate. When you start mixing taxes with ethics, you begin to use our tax system as a means to create your view of social justice, and they become a punishment rather than a means to generate funds.

In the end it's common sense when it comes to unemployment: The poor and middle class do not create jobs, they benefit from the opportunity to have them. The wealthy provide the opportunity to have a job through their wealth, based on the idea that the job will give them the opportunity to create more wealth than they are spending to create the job. When the welthy are taxed, they simply adjust their spending and hiring and in the end we pay for their taxes through added fees and costs (remember how prices of goods increased along with gas, it works the same with taxes) and also with reduced opportunities for employment.

When you take wealth from the wealthy, you reduce their capacity to invest in their own business and create more and better paying employment opportunities, and real unemployment rises (I do not consider work created by the government for the sake of providing jobs "real", but instead temporary replacements as they were proven to be during the Great Depression). This is shown in many European countries that view double digit unemployment as normal, such as Germany and France.

If anyone can prove this to be incorrect using real numbers and resources, and not just opinion based on what they think should work, I would be willing to completely change my entire view of economics and politics.