There is a lot of talk right now among our politicians about how to create jobs and prosperity in our country.
On one side, you have the followers of Keynesian economics. They seem to believe that government can actually stimulate the economy by spending money (and borrowing it since we are in debt to our eyeballs). They also seem to think that raising taxes is how you create jobs. The government is the key actor here (socialism.)
On the other side, you have the followers of supply-side economics and Milton Friedman. They seem to believe that the role of government is to provide the environment for individuals to prosper and create wealth. As they create businesses, so will they create jobs. They also seem to think that lowering taxes (or at least having stable tax rates), keeping regulations low, and basically letting the government get out of the way is how you create jobs and prosperity. The individual is the key actor here (capitalism.)
My personal belief is that the latter view is correct. You can’t tax people into prosperity. Businesses aren’t started to create jobs, they are begun to start a service/product and make a profit. Jobs are what happen when a business is successful. History bears this out as well. We had tremendous increases in prosperity in the 1960s when President Kennedy cut taxes, and again in the 1980s when President Reagan cut taxes. We had malaise and dysfunction under Presidents Nixon and Carter due to, among other factors, a belief that the government should play a more direct role in the economy.
Only the private sector creates prosperity. Every dollar the government spends (and some is vital such as defense) comes from wealth created by the private sector. The more the government grows in proportion to the private sector, the worse off we will be.
The 2012 general election more than any in modern times will be a referendum on which path the Unites States will take: one of greater and greater government control over the economy and our lives, or one in which the government’s role is to provide opportunity for success. Let us pray we vote well.
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