State of the Economy Address

When I watch CNBC in the mornings, one if the most consistent topics for discussion is that of the state of the economy.  While we are currently suffering what is statistically the worst recession since the Great Depression decades ago, our stock market has rallied to the point that many analysts are declaring that this crisis is over.  While only time could tell, I find it hard to believe that a problem that took us many years to get into would take months to recover.  

What I don’t understand is the steps that were taken in order to dig us out of this recession.  Some of you may remember the stimulus payments that were handed out to taxpayers back in May-July of 2008.  Our country spent several billion dollars that basically did nothing.  So what did we decide to do?  Lets spend even more money.  Another stimulus package was passed and we almost instantaneously added another $1,000,000,000,000 to our national debt.  But I guess it was fine since that $1 trillion represented only about 15% of what the national debt was at the time.  

While the ultraoptimists are excited about the direction they think the economy is headed, the biggest question that comes to my mind is funding for this massive stimulus package.  There are really only two ways to finance this insane amount of money - taxes and the federal reserve.  

The Federal Reserve could simply pump tons of money into the system, but that would only cause high inflation at best.  

So the only other option would be to impose more taxes.  I’m fine with it since America has the simplest taxing system in the world, and corporate taxes are at all-time lows.  

I work at a one of the most prestigious grocery stores in the country.  Since I don’t really do any work, I have the opportunity to talk politics with the other employees that don’t do any work either.  That’s what makes Broulim’s such a prestigious place.  Obama supporter #1, we’ll call him “Seth”, is all about progressive income taxes, meaning the more money you make, the higher percentage of your money goes to Uncle Sam.  Further conversating revealed his ignorance to U.S. History.  He didn’t realize that income taxes were discovered in 1913.  Ironically, that was about the same time America got into debt.  

Socialist #1 and Socialist #2, we’ll call them “Rick” and “Christian”, were another interesting conversation piece.  They are firm believers that instead of taxing everyone, only the rich should be taxed.  That is fairly similar to the initial purpose of income taxes in 1913 as it was intended to tax only the ultra rich.  The difference?  Under their plan, income for the wealthy would be capped at about $2.5 million.  That’s a great idea since I’m sure that will motivate people to become industrious and innovative.  

California has some of the highest taxes in the country.  According to another one of my co-workers, California Boy #1 "Craig", instead of handing out tax returns, California resorted to handing out IOU’s.  His wife is from Modesto, California by the way.

So let’s tax the $#@% out of people so that our government can get out of debt.  

This graph only goes up to 2004, before our massive spending spree over the last year, but I think it is fairly obvious that the strides we have made to tax ourselves in order to get out of debt has paid off.  Our debt since 1970 has really only grown linearly as opposed to exponentially.  That’s good news.  

My good friend Stephen Colbert brought up the idealogy of our brilliant leaders in getting out of the Great Depression.  Just spend.  That didn’t work so they kept spending.  It didn’t work until they joined a little fight called World War II, when we got out of the depression through more spending. (look at the graph)

So if we follow that same historical theory, we’ll just keep spending until we piss off the rest of the world and then we’ll get in a little scuffle with our neighbors, spend more money and we are on our way to another economic boom.  Brilliance at it’s finest.  

So until we go to war, we just have to impose more taxes.  That’s fine because that means our accountants won’t lose their jobs and become just another unemployment statistic. 

Throughout this mess, I have maintained with my co-workers that the way to get out of this crisis is to decrease taxes.  Less taxes means more money for the consumer to spend.  Consumer spending is a lot more effective than government spending.  

Corporations have resorted to outsourcing in order to cut costs.  Over the last couple of weeks I have learned from Obama that these costs are cut through loopholes.  

If we cut corporate taxes, corporations will come back to our shores.  This will provide more jobs, create more consumer spending and so forth.  

So Obama’s solution to convincing corporations to come back is absolutely jeneus, let’s tax them even more.  Let’s show them that their loopholes can be straightened out.  If we can show corporations that they are going to be taxed just as much overseas as they would be here, maybe they’ll spend the extra money to come back to America from India.  That will cause India’s unemployment to skyrocket, and perhaps that will be the catalyst that causes World War III.  A war would mean more spending, and booyah, we are out of this recession.  I don’t know about you but I’m convinced that this could really work.  

Disclaimer:  despite my disagreements with these policies, I understand that these policies are a result of Obama’s economic advisors instead of his own brilliance.  I’m not an expert in the field of economics, simply a bacheloreate in economics.  Therefore, these are opinions based upon my ignorance of the subject.

Next weeks post: How steroids saved baseball

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