Charlie: Various articles and news reports about the U.S. economy, and that of the rest of the world, seem to suggest that we may be sliding slowly toward another recession. Certainly, the ups and downs of our stock markets, and those of the rest of the world, show little predictability. And, in many parts of our country, we seem to perceive that our income disparities are tending to enlarge. The closure of retail outlets, and manufacturing, such as General Motors further fuel that uncertainty.
Bill: How is our economy doing? This is one of the questions that if you ask three different people you will get five different answers. It depends a lot on which news station you listen to, and what part of the economy you are living in for now. If you are like many Americans just living paycheck to paycheck, or are involved in the agriculture sector, things are not looking very good.
Charlie: Our government meddling with our economy in the form of tariffs, income tax alterations and significant enlargement of governmental deficits does not bode well for our future. Our president has even mused in one of his interviews, that he expects to be out of office when our economy collapses. Presumably, he will still be able to rely on his Russian and Saudi investors to maintain his extravagant lifestyle as he cruises forward in his many failing business ventures.
Bill: Our country has worked since World War II to make us a major player in the world market. During those years, other nations have also grown their economies to be major players in the world markets. We might be the biggest dog in the world trade fight but we are not the only big dog in this fight. When our government changes tariffs as easy as moving pieces on a checkerboard it doesn’t send a message to other countries that we are trading partners on which they can trust and rely. As an example, over 50 percent of the wheat, soybeans, cotton and sorghum produced in this country is exported. We need trading partners that know they can rely on us as a supplier. Soybeans prices have fallen from the $11 to $13 per bushel range in recent years to under $9 per bushel now. I hope there is a long-term plan that comes together soon because we are starting to look unreliable to our trading partners.
Charlie: What people overlook with tariffs, is that when the price of imported goods goes up because of the tariff, it increases the prices we must pay for those entities. For example, clothing made overseas, as most of it is, including Ivanka Trump’s line of clothes, will go up in price to pay for the tariff. At the same time, those products made in the U.S. that are competitive, will also go up in price because our manufacturers will not have any competition to force them to lower prices.
Bill: The current administration is telling us the economy is doing great. I worry about that because under the Supply Side Economic System a country goes into debt to invest money in a slow economy to kickstart it. Then the plan is to pay off that debt when the economy picks up and does better. If our economy is doing as great as some would like us to believe, why are we not paying off that debt instead of going deeper into debt? We will soon be over $22,000,000,000,000 in debt.
Charlie: Perhaps, it might be helpful, if start electing government officials, who more fully understand economics, and what both can be helpful and what should be avoided at all costs before we head into our President’s fifth unfunded bankruptcy.
Change the tax code, from top to bottom. Right now at all levels of taxation we have a disconnect between what We the People pay in, and what our governments at all levels are spending. At the federal level we have a progressive tax code, that in theory says those who earn more pay in a higher percentage than those of us who earn less. But with deductions, available to a few and not all, and income that this is classified differently, while higher income in theory pays more, they often pay a lower percentage that those in the middle. A flat tax on all sources of income, with no deductions could end that disparity.
Tax all benefits received as income. If an employer pays for health insurance, in whole or in part, that is income, and should be included in the mix.
At the local levels, eliminate the property tax, and make everyone pay a flat tax on all forms of income. If that requires a tax increase to pay for what is covered by our present property tax system, then we all pay it, not just those who own real estate including their home or business.
Increase the amount all contributions into programs from which we presently benefit to make them solvent. As with any insurance program, which is what Social Security and Medicare are, some will reap larger benefits over time because they live longer or use more medical services, but the same is true for those whose families collect life insurance because of an early death versus those who pay in longer and die later.
Make government spending more transparent at its inception. If new roads are needed, or repairs to roads are necessary, announce the intent to fund these projects, and how it will be paid for. If it requires a tax increase, announce that so that taxpayers can make a choice as to whether they want those officials to spend that type of money, or, instead maintain the status quo. At the federal, state and local levels, we are still paying for expenditures imposed by previous administrations.
Bill: I don’t think we should blame the elected officials for the quagmire we are sinking in. To find who is at fault we just need to look in a mirror. We are getting the kind of representation the majority wants. The majority doesn’t seem to worry enough about the increase in debt. They think something will magically happen that will pay it off without them needing to pay. Or, they don’t care what kind of country our grandchildren will inherit.
Until the majority of the voters get serious with their votes about reducing government our elected officials will not get serious either. If our elected officials don’t get serious getting our debt under control the debt will just keep increasing until our creditors stop lending us more money. That will not be a good day.
Charlie: And finally, don’t vote for politicians who promise you stuff that can’t be delivered, like building a wall with Mexican money, or giving everyone a free college education. There is no such thing as a “free lunch.” Those who tell you we can pay with grants, fail to tell you that grants are just taxpayer money with a fancy name. The admonition of the late Phineas T. Barnum is as true today, as it was when he purportedly said it: “There’s a sucker born every minute.” Try not to be one!
Charles Bierbach can be reached at firstname.lastname@example.org.
Bill Hoover can be reached at email@example.com.