Thursday, October 09, 2008

Enlighten Me...

I have never been much into politics. Not in Canada or in the US but I have to admit this election has me all wrapped up. I'm actually interested in what everyone has to say and what each party has to offer. I'll admit that I don't follow any particular party and never have. I consider myself pretty much middle of the road. I have some liberal beliefs and I have some conservative beliefs.

I may be one of what seems like few, that actually fact checks, or at least tries to find the truth. I don't automatically believe the Obama smear emails and fact check the claims. Nor do I automatically believe that McCain is the same as Bush...again some simple fact checks show otherwise. I do my part to educate myself with the truth. This means watching more than just one certain news network, or reading one news magazine. Common sense is that all media outlets are bias to varying degrees, so in order to get to the truth one must review many sources before forming an educated decision. Unfortunately I personally don't believe there are many people who do this. Some do, but many don't. Sadly my efforts to educate myself are, in short, futile. I am not a US citizen and therefor, unless I travel to Ohio, I cannot vote in this election legally...haha. But that is not the purpose of this entry. The purpose is to hopefully have someone explain something to me. I don't claim to be fully knowledgeable in the world of politics and when I apply logic, all be it my logic, I have become confused. It regards the candidates plans to lift the US out of this current economic crisis. I am posting with seriousness and not some hidden agenda. If anyone can help me understand better then I will be most grateful. So let's begin with what I personally, understand to be the candidates solutions...

Let's start with Obama, because quite frankly his plan is what is causing my confusion. He wants to lower taxes for the middle class and give tax refunds to those who don't even pay taxes. He wants to raise taxes on the rich(those who make over $250,00 a year) and businesses. He also proposes over $700 billion in new government social programs. That part I am pretty sure I am correct with. Now McCain's proposal is to leave taxes for the middle class the same, except for an added child tax credit. Sounds good to me, I'm having a second...ha! However McCain wants to lower taxes for businesses and he also wants to cut billions in wasted government spending and programs that don't work. Again, I think I got this part correct. So now I'll break this all down using my logic and possibly common sense...

Obama's lowering of taxes sounds wonderful, who doesn't want to pay less right? However I personally believe giving tax refunds to people who don't pay taxes is idiotic. If they have never paid it why would they get a refund? Isn't that sort of like walking into the Gap, grabbing a shirt off the shelf, taking it to the till and stating you would like to return it? And even better, the checker says "absolutely" with a smile, knowing you just took it off the shelf? Sure that may not be the best metaphor but it's all I got. Haha. Ultimately, to offer tax cuts and refunds one must make up for these cuts in another area, in this case it's business...

Obama wants to raise taxes on businesses, if you look deep, it's not just big business either, it's new and small business also. So lets delve deeper into the economy. Right now many businesses (big and small) are feeling the money crunch. For example eBay just laid off 1600 employees. We all know Starbucks closed many stores this past year(but some may not have noticed because you only go to the one on the opposite corner of the street. Hehe.) My point is, businesses are tightening their belt straps, many struggling to keep a profit and this means higher unemployment rates. Just because a company is considered a multi million dollar company it doesn't mean the company is pocketing millions. Profits are reinvested into a company by ways of product, production, employees, insurance and so on. Businesses are not cheap to run. Heck you all know I want to start my own photography business and I am amazed at the cost and I'll be working from home! But that's another topic. When I ask myself what effect raising business taxes will have on the economy I come up with a couple different answers in regards to the tightening of the money belt strap for these companies that are already burdened. Ok, so now these companies have to make up for this new loss of money, how? a) cut more jobs b) raise product prices, and c) more chain closers. These three examples lead to a loss of investors willing to invest in failing businesses. I just don't see a way around any of those. Am I missing something? Do I not have all the facts, or is my understanding of economics off base in regards to a failing economy?

So I looked into what companies would be affected...pretty much all. This means everything from your local grocery store to Walmart and Mc Donalds. So our taxes are cut but guess what, our grocery bill just went up and so did the cost of living in general. (refer back to b) Ultimately this raise in prices will make up for those taxes we no longer pay. But again, if I am wrong, please explain why.

So let's reflect his opponents proposal, no tax cuts except the child credit and lowering the taxes on businesses. So how will these affect the economy? Well like Obama, McCain needs to find the money to make up for the child credit. So can lowering the business taxes do this? Not directly but in the long run...yes. For now though, he may have to turn to the government spending cuts for that one. So how will lowering the business tax affect the economy? Well lets brains storm here. For starters this tax relief won't put hundreds of thousands in the pockets of business owners, remember, to run a successful business one needs to re-invest into that business. So with some financial relief that comes with lowered taxes, business won't need to cut jobs. In fact existing and new businesses will have more money to actually create jobs and it seems to me that this is the goal. With more jobs comes higher production. With higher production comes more profits and with more profits comes a successful business and this means more investors which keep companies thriving.(Take a look at Wall Street right now, investors have backed out of investing and the economy needs them in order to grow and thrive!) Lastly, with growing companies comes MORE taxes being paid. Sure the taxes may have been lowered in the beginning but the more successful you become, ultimately the more taxes you pay. ( This is that "in the long run" I mentioned earlier.) So you can raise taxes for a quick fix but ultimately this lowers production and can close businesses all together or you can lower them, enabling them to succeed and get more taxes in the long run. Put another way, imagine two stores side by side, both selling the same green pants. One store charges $50 and the other store charges $40. Sure some one will spend the $50. Let's say 3 people did. They made $30 more profit than the cheaper store right off the shelf. However the cheaper store sold 7 pairs because of there lower price. The stores each paid $25 wholesale for the pants. In the end who made the most profit? It's basic math but for those who don't want to have to think, and I totally understand, it was the store who sold them for $40. It's the same logic for taxes, you can make someone pay more for a quick buck but ultimately you loose money in the long run. Again, am I wrong here?

The last question I have in regards to the economy goes back once again to Obama and his $700 billion in new spending proposals. Where exactly does he plan to get that money? Does he plan on paying for this with the taxes he raised for businesses and the rich? That must be a mighty tax increase to pay for that AND all the cuts he is proposing! I just don't get it.

Now don't get me wrong here, I am not an Obama hater. There are many issues on both sides of the board that can raise questions, but right this minute the fall of the US economy is what is weighing on every ones minds and this is why I am at a loss as to how Obama's plan will work. So don't bother responding with other issues, I simply want to hear about this one and this one alone. When I have brought this up with others,(Obama supporters) they haven't had any answers on how his proposal will work but instead try and deflect with statements of "change", "peace" and "social heath care" that Obama stands for. What I want to know, is if Obama is elected how will his plan get us out of this crisis and not dig a deeper hole, because as I stated above, I just can't find the logic in his plan.

Now I'll really be impressed if anyone actually bothered to read this post in its entirety! LOL!

13 comments:

Asa's Dad said...

You've certainly put quite a bit of thought into your post, Danea. I largely agree with your thoughts on these conundrums. The answer though is a bit more elementary than one might at first glance believe. Obama's fiscal policy for his presidency has not changed substantially since before the current crisis. Take a glance back at what he generously promised a year ago, and compare it to his current version. Do you see the difference? The major points are identical, though he has over the campaign added many more small but expensive social programs aimed at solidifying his support from the unions, the poor and the lower middle class. Who doesn't like a social program aimed at themselves? I believe his goal is to make enough promises to get elected, and then let Warren Buffet figure it all out in January. The end result is major cuts in spending, but ssshhhhh - Don't tell the voters!

So now we're in this fiscal crisis that will be with us for some time, and just when the government should tighten the belt and stop spending freely on any idea that would look good in a re-election campaign ad, Obama refuses to name any program that could or would be cut. His only response is a "possible delay in implementation" of some programs. Ok, so there's no question that he wants to spend some money we don't have yet, but no problem, that's where taxes come into play. After all, why should someone who has worked so hard for their fortune be allowed to keep it? If you are lucky enough to be wealthy, guess what!?! - Obama is more than happy to help you spend some of that cash on some golf lessons for prison inmates. Just remember children, you only have the right to earn a lot of money, not keep it! Government always knows best how to spend your money.

I can understand Obama's desire to cut taxes for the masses, but how can he claim that 95% will get a tax cut when 30-40% don't effectively pay any income taxes? He should come out and just say it. Those who pay taxes will also be providing the funding for a refund to those who don't pay income taxes. Redistribution of wealth would be the first step in the direction of a socialist state and that in it's self is scary to those of us who want to become wealthy through hard work and determination. The bonus side to a socialist government - You'll never go hungry if you can wait a few short hours in a bread line. Beats working any day!

Oh and what about the 11 to 20 million illegal aliens? In the past, very difficult fiscal times have produced some very protectionist laws aimed at prioritizing the American workers. Not bad for me, but what if all those jobs that "No American is willing to do", suddenly become a hot commodity for the populace? What if the government then requires proof of citizenship or legal residency? What if those laws were actually enforced? Will we have 11 to 20 million illegals living in boxes in alleys? Will they go home? Nope - easy question. Obama would solve the problem quite simply with another amnesty program. Simple as that. Kill two birds with one stone. 1. Increase the tax base to to pay for more social programs for these new Americans and 2. add 11 to 20 million registered democrats to the rosters. Definitely a win-win come next election.

Am I biased? You bet! I want the right to self-determination, not expanded government programs that force me to hold the hand of those who belligerently refuse to pull their own weight.

Zee said...

As I sat chatting with Suzy Q on the phone, my dear hubby came into the room stating that he posted a response on my blog, which was then followed by "...and you might lose a few friends."

Greeeeaaatttt! LOL

Hey I am all for people sharing their opinions and view points. I won't judge or hold anyone's political views against them as I know my friends are very diverse politically. That's what makes this country great! However what I can't stand is those who spew political propaganda claiming them to be facts and then getting nasty and defensive when they are questioned. Simply put, those who have the arrogance of I am right and you are wrong and may as well be plugging their ears and yelling" I'm not listening, I'm not listening."

With that said I am hearing for the first time some open and new thoughts from Jeffypoo. Not much is surprising though and like anyone else...I respect your comment. I am happier to debate with people who have factual knowledge of what they are speaking of. Now with all do respect lover boy, you never actually answered my question on how Obama's economic strategies WILL work. So I guess I'll take this response as one more person who, like myself, can't see the logic in his plan. xoxo

Susan Wright said...

In regards to where is Obama going to get the $700 million. I believe he is going to pull it out of his ass.
Just kidding. I loved this post. I was wondering the same thing. I have heard people actually ask this same question and pretty much like you said he answers with words but they don't make any sense.
I just hate to think of small business owners getting hit with higher taxes. What would happen to "Downtown USA". I love shopping downtown in older towns.
And Asa's dad...I wonder what kind of president Warren Buffet would be?
And I loved this comment:
"Just remember children, you only have the right to earn a lot of money, not keep it! Government always knows best how to spend your money." This sounds remotely familiar. I'm thinking Soviet Union for some reason.

Susanne P. said...

roh roh...looks like Jeff might have been right. LOL

Zee said...

LOL @ Susan and Susanne.

Susan, when it comes to small business, if all small business gets hit with a 50% tax then I can kiss my photography business goodbye, with overhead etc...it just would not be worth it and I imagine few small businesses would survive.

Susanne, if I lose friends over my husbands (or my) political views then they weren't really my friends to begin with. Whether it be politics, discipline, religion, you name it, you are not going to have the same opinions on everything with all your friends and if someone is willing to terminate a friendship over it then so be it. However I think the real lack of responses is one of two things. 1. Few people being bothered to read the whole thing...LOL. 2. No one can answer my question on how Obamas' plan will work. ;)

christina said...

well i read your post but i have no answers lol, my hubby follows politics religiously lmao and he would probably be able to tell you, but i personally can not. what he did say is that the taxes paid for home income not business income will go up like this, if you make 250,001 a year then you will pay more taxes on that 1 dollar, not for the whole 250,000. shoot, not sure if i am explaining right.

anyway like i said i have no answers lol and like you i am middle of the ground too when it comes to politics. i'm registered republican lol but have no problems voting democrat if i like that party better at the time LMAO.

Susanne P. said...

i wish more people would answer so i could get some other views as well. this is all confusing to me, too.

Asa's dad said...

Christina, you're absolutely right about the promised tax cut for those making less than $250,000 (joint). But the problem arises when the economy falters (as it has) and the tax revenues fall off sharply. Even with raising taxes in all the other areas Obama has suggested he will, the income will not be enough to be offset the tax cuts and social programs he promised. If he follows through with it, it would be adding to the national debt to pay for it all. Not by a small amount either. Many independent economic experts have suggested that Obama's plans would add between 300 and 800 billion dollars a year to the national debt. McCain doesn't get a free pass here either. Those same experts suggest his ideas would add up to 300 billion. Looks like our founding fathers were correct that the beginning of the end is when the people discover that in a democracy, they can simply vote themselves more money.
Uh-oh.
I personally love tax cuts because I think the government wastes too much of the money I work so hard for, but not at the expense of our counrtry's ability to thrive in the future. With Social Security failing, and so many people refusing to save for the future, how will people who live longer pay for their extended life span? The answer is simple, they won't have to because the government can raise my taxes to cover them. I work 11 to 12 hour days to pay for the things I enjoy in life, and the thought that my taxes will, under Obama's plan, go towards a rebate for the jerks who work so much less because they have no ambition for advancement really burns me up. I firmly beleive that Obama's plan will increase the cost of living for the rest of us simply due to the corporations passing on the cost of higher taxes to us, the consumers. With everything costing more, isn't that similar to having no tax cut at all? Basically my net gains would be zero or negative. But my hard work will pay for someone else's laziness. If Obama is elected, I think that after congress and the people finally see the true cost of his plans, the nation will reject the majority of them and few of his election promises will be fulfilled. Quite possibly a one term president along the lines of Jimmy Carter. Boy the future looks bright.

Anonymous said...

I have not been following the American election campaign very closely because we have all been swept up in the glorious excitement of the CANADIAN ELECTION. It's really a shame that Obama and Maccain pale in comparision to the wild renegade charism of the Canadian Candidates.
he he he
Calli

wendy said...

i don't pretend to understand the complexities of it all esp. since I cannot seem to be able to cut through the propoganda from each side, even after all the fact checking that I can find.

My one thought, though, is that the economic crises needs more than just tax policy to fix. Its global and goves very deep. I think obama's doing better right now because he has what seems to be a more coherent plan. If McCain could come up with one that is consistent, he might do better...

I will openly confess. I will do worse economically under Obama's plan. but I'm still voting for him.

christina said...

hi asa's dad :)

everything you said made sense, and i do understand your frustration. I personally wouldn't want to pay for the ppl that sit on their asses and live off of welfare. that is my biggest complaint. it just enables them to lazy and drives me batty. so are those the ppl you are talking about?

the other thing that i do not get is how are we in debt? don't we make the damn money lol so if we make (print or however they make those bills) then how do we owe it? i have never understood that. i know i probably sounds stupid with that stupid question but i just don't get it.

i would also love to know how much money we GIVE to other countries each year? and why do we do that? makes no sense. sounds to me like we need to concentrate on taking care of our country and not other's kwim? drives me batty.

anyway, i have no idea who i am voting for this year. i voted for bush when he and al gore ran for office because i couldn't stand al gore, but look where bush has brought us? so i really think that no one can really say who is going to do better in office, because really, how the hell do we know? we don't. politics drive me nuts LMAO.

Anonymous said...

This site will help you wade through the lies and biased opinions:
www.politifact.com

http://www.politifact.com/truth-o-meter/about/

Zee said...

I've seen this site, but it doesn't answer the questions I posed here.