Sunday, February 8, 2009

Government spending vs. Tax cuts

Congress is on the verge of passing a "stimulus" package that will be in the neighborhood of $800-900 Billion dollars. That's with a "B" for billion. With the $700 Billion already authorized last Fall to bail out the credit markets, we are looking at a deficit next year of an amount approaching $1.5 Trillion dollars. If this continues, pretty soon we'll be talking serious money.
Where will this money come from? It will come from your tax dollars, your kids tax dollars, your grandkids, etc. This tax money goes to Washington, DC and is funneled into various programs. The Bureaucracies like the IRS, and others siphon off some of these tax dollars for pay and benefits (which are much better than those in the private sector)for the Bureaucrats . The money is then sent out to the States for various programs. Here in Connecticut we get back $73 for every $100 sent to Washington.
If this money never went to Washington, and was spent here in Connecticut, our economy would be getting it dollar for dollar. As it stands now we only get about 75% of that money going into our economy minus whatever the State & Local Government Bureaucracies siphon off for their pay and benefits. If taxes are cut the benefit to our economy goes up, because more of our money stays here. If taxes go up, we lose the amount of the taxes plus 25% of what comes back. Would you put your money into a private investment like that?

There is definitely more "bang for the Buck", when taxes are cut as opposed to increases in Government spending and subsequent tax increases.

Who knows how to spend your money better - the Government or you?

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