Why The Stimulus Will Fail In The Long Run

   Whether it has been a tax rebate from former Pres. Bush or the current American Reinvestment and Recovery Act that Pres. Obama pushed for , these so called stimulus plans are doomed to fail in the long run.

   These quick fix patch jobs that are being slapped on the hurting economy will make us feel good for s short time , but will do nothing to stop the long term bleeding.

   The idea behind a stimulus plan of this sort is to inject money into the economy in ways that will create jobs and give people more money to make purchases with.  In the case of  Pres. Obama’s   ” ARRA” , most of the jobs created will be in the government sector not private. By creating government jobs or jobs reliant on government funding you create a larger need to raise taxes , which takes more money from the citizens that they would otherwise buy goods and services with. 

 But let’s assume that jobs are created and people earn a wage , and let’s say that they spend that money and don’t save it ,(which by the way more Americans are doing in record numbers), where does this money go?

  Well many may believe that the money goes to the store that they spent it in, and initially it does. Some of it will go to pay store employees, some will go to pay energy bills and suppliers. But unfortunately much of this money that we spend to purchase goods in this country will end up in the coffers of foreign governments.

  Why you may ask does this happen? Well first of all our government is borrowing the money that it is using as a stimulus, mostly at this time from that nation who has long had our best interest at heart , China.

   Also most of the things we purchase here in the U.S.A. are made over seas, again mostly in China, seeing a pattern here ?

  Now if we continue to go deeper into the cause of our economic troubles here in the U.S.A. we have to ask why we are buying so many foreign goods as opposed to goods manufactured right here at home? Well the short answer is because they are cheaper.

  Why are they cheaper ? Because China and other nations do not have the amount of restrictions on their manufacturers that those here at home have. Most of these restrictions are a result of environmental special interest who have lobbied for tighter controls on companies and industries. Every time a new restriction is imposed on one of these industries the cost of their product goes  up until they can no longer compete with the foreign companies . At this point the American companies are forced to either go bankrupt or move their operations out of the U.S.A. . No matter which they choose to do it is a loss of income for American families and a loss of revenue for the government .

  In such a unfriendly environment as we have created here for manufacturing industries it is no wonder that there is no rush for companies to invest in America, why would they when the American government seems bent on destroying them.

  We here in the United States of America have long since passed the point where we will be able to manufacture the things we need and want, we are a consumer nation , no doubt.

  If we want to really stimulate the economy though , we must make some hard choices  and be willing to work for the things we want and need.

  First we must reduce the tax burden on working Americans, this is the fastest and best way to put money into their hand to be spent on goods. But more important we must ignore the doom sayers who continue to cry “the end of the world”. We must roll back the thousands of draconian regulations and requirements that have crippled our chances of competing on the world market with goods manufactured right here in the U.S.A. . And we must resist the urge to impose even more punitive programs such as “cap and trade” which might be the final nail in the American economic coffin.

  We can not sustain an economy that consumes while creating next to nothing. We must have the choice of buying home grown goods as apposed to foreign goods. As we roll back these punitive regulations we lower the cost of the goods.

  The benefits of this are many, first we keep American dollars in America. Second we can again compete on the world market and bring foreign dollars into our country for a change. And maybe the most important aspect of all , it would encourage investment in companies in the United States, which would create more jobs which would increase tax revenue without increasing tax rates.

  To think that the government must take , borrow and steal money from its own citizens and foreign countries just to give it back in an attempt to stimulate the economy is bizarre, when all that is really needed is to allow the citizens the right to keep more of their own money to spend as they see fit.


%d bloggers like this: