Monday, January 26, 2009

Letter to the President

Dear President Obama:

You seem to be a bright person, as evidenced by degrees from Columbia and Harvard, but it is obvious that you never took an economics class. I am writing this letter to educate you and hopefully to help you avoid some bad decisions for yourself and the American people.
You have proposed spending over a trillion dollars (that's $1,000,000,000,000) on a stimulus package to help our economy. Actually, that would be a good idea if the government had a trillion dollars saved up somewhere. The problem though is that the government is already in a deficit position and would have to borrow the money. Also, it would have to borrow an additional few hundred billion to pay the interest that will accrue on the debt over time. Borrowing is how we got into this mess in the first place and borrowing that much money would be even more devastating to our economy, as explained below.
A government's only significant source of revenue is taxes. To repay the trillion plus in debt, you are going to have to raise taxes significantly. That will take money away from people so that they will not be able to buy as much as they want. That means that many of the people who produce all our products and services will lose their jobs, and they in turn will be forced to buy less. This will result in a downward spiral of job losses and diminished economic opportunity for everyone.
Also, it does not really matter who you tax, it will all have the same effect. Actually taxing the "rich" will have the most negative effect because they buy the majority of the products that the middle class and poor produce.
What you should do is cut taxes. This will put more money back into the private sector so that people can buy more of what they want. This will create more jobs and an upward trend of economic opportunity for everyone.
This is not rocket science and quite frankly I am surprised that you did not learn it somewhere at those fancy schools you attended. That is okay though, we all have gaps in our education and this area just happens to be yours. I hope that you have found this helpful and that you can now make wiser decisions regarding our economy.


A Concerned Citizen

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