In watching the Republican Convention, it appears that all of our country’s problems can be solved by cutting taxes and reducing regulations on small businesses.
It’s time for a realty check. During the Bush administration both taxes and regulations were cut and look what happened; our country experienced slow growth, falling real wages, slow employment growth, a very substantial increase in our national debt, and the “Greatest Recession” in many of our lifetime. These facts can not be disputed.
While I believe that the tax code should be completely revised and that some regulations need to be reviewed and perhaps eliminated, the Republican Party apparently does not understand that it is demand that creates growth, and consequently jobs; not lower taxes.
If products are in demand and individuals have the funds available they will purchase them. Unfortunately over the past decade real wages have gone down as our country has transitioned from an industrial economy to a service economy. Adding to the problem has been the outsourcing of jobs overseas and the housing crash all of which have resulted in less cash in the pocketbook of the consumer. As a result, overall demand is down and consequently employment.
What our country has to do is to get more money into the hands of the consumer. This can be done either through tax policy, public work projects, or an increase in the minimum wage. Reducing uncertainty and developing long-term solutions to the problems facing our country would also give our economy a psychological boost.