J.C. Moore Online
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Posts Tagged ‘economic growth’

Just Raise Taxes

Sat ,18/07/2015

Being fiscally conservative requires making a sound national budget and raising the revenue to fund our nation’s needs.  The logical approach to paying off our national debt is to find middle ground between raising taxes and cutting spending. The tax rates, particularly those at the top of the earning scale, need to be adjusted upward,and there is also a grave need for spending restraint, elimination of duplicate efforts, and the elimination of waste and wasteful projects driven by special interest groups on both sides of the aisle. Since few Congressmen are willing to vote to cut pet projects, and perhaps lose their own, it leaves us with just one alternative:        ” Just raise taxes”.

As the chart below shows, cutting taxes does not necessarily lead to greater economic growth, but it certainly means a large increase in our national debt. The high tax rates and increasing national debt under the Eisenhower administration were mostly to pay off our war debts and rebuild Europe, yet there was also growth in GDPand and jobs. Reagan dramatically cut taxes, and experienced a lower growth in GDP, more jobs, but also a large increase in peacetime national debt.

Article PhotoTax Rates and Economic Indicators


If you wonder why a country as rich as ours is going broke, it may be because of Arthur Laffer‘s economics, Grover Norquist’s anti-tax pledge, and ALEC.   We should not let men we did not elect or some secretive organization that represents special interest groups determine our tax policy. If you will remember, under Eisenhower, the top tax rate was 90% and we used the money to take care of our soldiers, send them to college, rebuild the countries devastated by war, and build the interstate highway system that fueled economic development for the next several decades. Now we have cut the top tax rate, the corporate tax rate, the capital gains tax, and were now working on cutting the inheritance tax, while we are also cutting the safety nets and help for the poor because we cannot pay for them. We are better country than that.

Norquist claims 235 US Representatives and 41 US Senators have signed his Pledge. In doing so, they have clearly given up their responsibility as our elected representatives.   Those in the US Legislature who have signed the pledge are listed here. You may wish to check see who from your state has signed the pledge and contact them. Since Norquist claims that signing the pledge is binding into perpetuity, I would suggest that we make sure none of those who signed his pledge are re-elected.


What Does the Solyndra Bankruptcy Mean?

Tue ,20/09/2011

 No one knows for sure why the solar panel manufacturing company, Solyndra, went bankrupt or what it means, but Congress is now investigating the matter. Though it will be useful to know what went wrong, bankruptcies in these tough economic times are not unusual. It is not clear why Congress is investigating the matter, but if the investigation is used for political purposes, it may delay our development of renewable energy resources. This could further hurt our economy and actually cause the loss of jobs.

In spite of the fact that the Solyndra bankruptcy may have cost 1000 jobs, that is a small amount compared to the hundred thousand plus workers who now work in the solar energy business in United States. Solar energy is one of the fastest growing industries and the graph above from this article estimates that the use of solar energy will increase fivefold by 2020. If the United States does not invest in the production of solar panels, it is almost certain that other countries will. China has set aside $34 billion to be invested in the production of solar panels. The $500 million in loan guarantees to Solyndra is rather small compared to that amount.

Unfortunately, the US investment in solar energy may be derailed by  Congress.  In spite of the other problems facing our nation, Congress has now launched a Congressional investigation into the Solyndra bankruptcy. It would seem that the investigation is politically motivated with the goal of embarrassing the Obama administration and derailing our efforts to reduce our dependency on fossil fuel. The Department of Energy has made a number of loan guarantees for investments in green energy projects and this is the only one which has had a serious problem. A number of large and savvy investors put over $1 billion into the Solyndra, so it cannot be claimed that it was was a bad investment from the beginning or that the company was supported entirely by the Department of Energy. Also, the political ramifications are not quite clear, as this timeline for the loan approval process for Solyndra shows it started in 2005 under the Bush administration.

Note added on 11/13/2014: Although the Solyndra bankruptcy has been used for political purposes to discourage investment in renewable energy, the loan program overall  has been quite successful.  Bloomberg News reported yesterday:

The U.S. government expects to earn $5 billion to $6 billion from the renewable-energy loan program that funded Solyndra LLC, supporting President Barack Obama’s decision to back low-carbon technologies. The results contradict the widely held view that the U.S. has wasted taxpayer money funding failures including Solyndra, which closed its doors in 2011 after receiving $528 million in government backing.

(c) 2011 J.C. Moore