Deficit spending may or may not work to jolt the economy back to health. That is a big gamble when you consider the impact that enormous government borrowing will have on your income. Despite what the administration and Congress is saying, a lot of economists are saying this will not work. You can not fix bad debt with more debt. Then again you can, but it will only make thing worse.
I was listening to some conversations on Bloomberg Radio today and I could not help but wonder 'if you knew and understood the impact these bailouts will have on you, would you still want them?' The real ity is simple. Tax relief for individuals is promised, but borrowing to pay for this will only lower taxes for the short term. Taxes must rise to repay the debt, and many economists believe that will cause a second slowdown in the economy because of the large amount of money being borrowed. The numbers they were talking about today was that 800 billion in new bailouts will create the need to raise taxes about 30% within a few years. The highest tax brackets will have to return to what they were in the stagnant 1970's where the upper brackets saw 78% - 80% tax brackets. I lived thought the 70's and 80's and do not want to return to those tax levels.
When you think about a lot of pork that has been included in this budget do you think the bailout is a smart idea? On Lou Dobbs this evening, they uncovereda provision for $88,000,000 for a new Coast Guard Ice Breaker that will not be able to delivered for 10 years from now. How will this stimulate new jobs immediately is beyond my comprehension.
The Congressional Budget Office announced yesterday that this bailout as opposed to doing nothing will actually contract the economy, as opposed to grow it. It is pretty scary when you think that the Congressional Budget Office studies is made up of mostly Democrats. If they say doing nothing would be better, why the rush to spend another 800 Billion? One cannot help but wonder...is this really a crisis, or are we being taken advantage of?
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