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I believe a demand side economic plan is the best path to increase wealth for the largest number of people. Investment in people and infrastructure by government would do more to raise living standards than a supply side economic plan that relies on the trickle down of income from the wealthy. Not that trickle down does not occur. It's just a less efficient use of the government's money. cutting taxes on dividend income for the shareholder class is probably one of the last effective ways to grow the economy that I could think of. Spending that money on educating our youth is probably the best investment we can make.
The Democratic Party understands demand side economics. Unfortunately, they have not figured out a marketing plan that the people will understand. I don't know how hard it could be. the term "trickle down economics" says it all. the wealth only "trickles" down. "Percolate up" sounds much more productive. "Bubble up" even sounds fun, like the economy struck oil. Combining this argument with educating our children and investing in our future can only be a winner. Cutting taxes to the rich is a giveaway. During the presidential campaign Congressmen Dick Gephard hinted at this concept but articulated poorly. It needs to be enunciated with conviction, with optimism, with hope.
U.S. ECONOMY
The American economy has been growing at a steady rate for the last couple years. Why, I am not too sure. Possibly it's because the power of low cost borrowing exceeds the drag that the debt should cause. At least so far. Here are some important numbers:
According to statistics published by Economagic, when George Bush took office, the sum of debt owed by all credit markets was $27 trillion. By the 4th quarter of 2005, that number had climbed to $40 trillion. Assuming all this money was spent on items that contribute to the gross national product, it means that roughly 1/4 of all output over this time came from debt.
April 30, 2006
Jim Forbes