- Politics and Social Issues
What is the most powerful force against our deficit
The deficit in our country is growing by the hour as more money is spent than is coming in to the government. Our financial situation needs to improve but the question is what is the right approach? Our unemployment rate is not where we want it to be and the uncertain future costs that business will incur based on future unknown decisions by the government needs to change. This involves not only the laws generated by Congress but the rules, regulations and actions by individual federal departments and agencies.
There are many issues in our economy not the least of which is an unfavorable atmosphere toward business and their needs. Government at all levels needs to create an environment friendly to businesses. Some states have learned this and have taken action to create an environment in which businesses can flourish. Granted the options which some states have initiated have proven successful for their economies including unemployment rates below the national average. Ronald Reagan had a quote about federal deficits which is stated below:
“The most powerful force we can enlist against the Federal deficit is an ever-expanding American economy, unfettered and free.”
A society which has an environment where businesses are ever-expanding, unfettered and free benefits the amount of income being received by governments at all levels. The more businesses expand and hire more workers the more income is funneled into the treasury of governments across the country. Working individuals pay taxes and the more workers there are both full time and part time increases government income.
With regards to part time workers which is occurring in higher numbers resulting from the rule of thirty hours being considered a full time employee. Full time employees come under the requirements of the healthcare legislation if you have fifty or more employees a business must provide healthcare as a benefit. This causes the number of employees working less than 30 hours to increase. While the numbers increase tax revenue increases but not as much as if they were working 40 hours. The costs of healthcare for each employee can run into hundreds if not thousands of dollars. In the past businesses offered the option but were not required to provide this benefit. Individuals chose their own health insurance provider for the benefits they needed at a cost they could afford. It is no longer the case. This aspect is part of the deficit problem since the more costs a business incurs the less profit and thereby less taxes to the government.
Part of the environment which is hurtful to businesses along with laws, rules and regulations include the tax structure. Our tax structure is complicated to say the least with thousands of pages of tax rules which is hard to understand. Our tax structure needs to be simpler so all of us can understand the requirements. It needs to encourage business growth and the success of individuals without penalizing them for earning more money.
A strong economy where businesses and individuals flourish in a business friendly environment is good for the country. Reducing our deficit should start by creating a friendly business environment by reducing the tax burden on businesses and individuals. If businesses have more revenue to expand and hire more workers more tax revenue would be received by the government. In addition if individuals have more revenue they spend it on wants and needs and creates opportunity for company making and selling products and service to expand. In the past we had a strong economy but the environment changed at some point. A strong economy is a powerful force against deficit spending only if fiscally sound policies are put in place. In the words of Ronald Reagan an ever-expanding American economy, unfettered and free is the best defense.