Economic Policy

Economic Policy


        Chad Stigall

        Econ 100

        11/26/96


     The new economic policy of the united states should include cutting

taxes, reducing governmental waste, and balance the budget by having a smaller

more efficient federal government.  It should include equal opportunity for

financial security but not through a government sponsored redistribution of

wealth program.

     Cutting taxes across the board including  income tax rates, capital

gains and estate taxes among others should provide a growth spurt for the

economy.  Allowing people and businesses to keep more of their hard earned money

would enable them to spend more money.  People would be able to buy more cars,

refrigerators, homes etc.  The businesses would be able to build new factories

with better more efficient high tech equipment.  These new factories and

expanded businesses would employee more highly paid workers which would expand

the tax base and allow us to be more competitive in the world marketplace.

      Reducing the taxes would also motivate people to work harder and save

more.  The way things are now people can not seem to get ahead no matter how

hard they work.  The harder they work the more the government takes while others

who choose not to work hard or have not  developed the skills to earn a decent

wage reap the same and in many cases more benefits.  For example student loans

and grants for college board and tuition fees are largely unavailable to lower

middle class  families let alone middle and upper middle class people.  Reducing

taxes on businesses would also allow them to invert more on new product

development and research which in many instances the federal government now

subsidizes which requires management.  This government management bureaucracy

cost tax payers money and is unnecessary because free market demands and the

extra money they would save from tax cuts would motivate businesses to fund

these programs themselves.  This is just an example of what a smaller more

efficient federal government.  "Citizens in the united states today pay 38.2

percent of there income in taxes every year" (RNC Talking Points).  This is way

to much money for Americans to be paying. "Cutting everyone's taxes by 15

percent and giving them a 500 dollar per child tax credit would cut a typical

families tax bill in half, allowing them to keep an average of $1,600 more of

its hard-earned money"(RNC Talking Points).

     The question is often asked as it was in the recent presidential

election, how can we balance the budget and have significant tax cuts?  There

are several ways in which the government can cut taxes while maintaining

worthwhile government subsidized programs, which will be discussed in this paper.


      To have funded tax cuts the government will have to cut spending by

eliminating waste and by reforming while preserving needed entitlement programs

such as Welfare, Social Security and Medicare though slowing the rate of growth

in spending on them.  As quoted in a Business Week editorial "Cutting the growth

in Medicare spending by $150 billion would help open the way for a truly

balanced budget, lower interest rates and higher economic growth" (A Vote for a

Sensible Center 194).

       To eliminate waste the government will have to cut programs that are no

longer needed and programs that overlap each other.  "The federal government

today has 163 separate job training programs, 26 food programs and 180

educational programs. The government needs to eliminate some, consolidate some

and change others" (The Balance Sheet). The government can also cut waste by

cutting the amount of money that some of the governmental agencies receive for

example the "Republicans want to cut funding for the Commerce Department and the

department of Urban Development budget by $715 million, Foreign Aid by 11.5

percent, Defense budget by $6 billion and the congresses budget by $205 million"

(The Balance Sheet).  They can also reduce waste by spending money more wisely

which can be accomplished by reforming some of the gover
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