Tuesday, September 25, 2012

Taxes, government spending, and jobs. A Three part special

Part 2: Government spending.

     Given that I want to cut the deficit you might think that I oppose any increases in government spending. However this answer is far from true.

     In a complex world, just as not all tax increases are good, not all increases in spending are bad. Some increases in spending, such as in infrastructure, science, and the environment are not only good for the economy, but vital for sustainable growth.

     The state of our infrastructure is shameful. In 2009, the U.S. got a D on it's infrastructure report card. On report by the urban land institute states that it would take "an estimated $2 trillion just to rebuild deteriorating networks." The report also says that the U.S. is falling behind on infrastructure. I believe that a 3 year study by the federal and state governments to determine which projects deserve to be built the most should help fix the problem. A good infrastructure system would make the United States a more competitive place in which to do business. Each state, and the federal government would spend additional money on these projects. The goal would be to spend an additional 1.5% of the federal and state budgets on infrastructure. This idea would also create jobs. If the projects ran over budget, the money would be taken from other expenses. The money to pay for this would come through sales taxes.  A good starting point would be to institute a state sales tax of 1%.  In an earlier post, I proposed a national sales tax of 10%.  Raising this tax to 11% should cover the expense of the projects.  In addition, corporate sales taxes should be raised by 0.25%.

     Funding science projects is also important. It makes it more likely that important discoveries are made in America, not overseas. This would encourage people in our country to become scientists, allowing more discoveries to be made here. This probably would indirectly raise science scores in America. Finally a thriving science community would strengthen our military and businesses because both areas are dependent on scientific innovation.

     Environmental is fairly easy. Invest in alternative energy such as wind solar, and nuclear power. It is important that we are first in this field and eventually can produce enough power to fuel our selves. We should eliminate corn ethanol because it only gives 34% more energy then it takes to produce. Also it raises corn prices, which raises all foods that contain corn. It also raises the prices of meats from animals that are fed corn, such as cows and chicken. I believe that cap and trade is a good idea. Unfortunately, this plan has been given a bad connotation. Republicans have labeled it as job killing, but in reality it is a free market solution in addressing global warming.



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