Federal Deficit | Teen Ink

Federal Deficit MAG

By Anonymous

   The solution to the federal deficit is two-fold. The first phase must be to cut taxes. I know it sounds bizarre, but let me explain. There is a theory of economics called supply side. These economists believe that if the federal government cuts taxes, then the revenues collected will go up. The basis of their theory is that many people don't invest money because of the high tax rates and that business profits would rise drastically if taxes were cut. More money invested in the economy from individuals and companies means more taxable money. The tax rates would go down but the amount of taxable money would go up. One couldn't totally slash the tax rates, but an overall lowering could increase revenues.

If revenues could be increased with a tax cut (which would also make people feel better!), then the second phase of the deficit reduction plan wouldn't be as severe. This second phase is to cut federal spending. Tough decisions must be made in order to reduce the huge federal deficit. These decisions can be made easier. If the politicians in Washington weren't as intent on maintaining decision-making power and would look rather at the Constitution to see exactly what the federal government should be funding. A decision and whether to fund Aproject a' or Aproject b' would be much easier if we realized that Aproject a' was not a job of the federal government. And there are many such programs emanating from our capital. ?

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i love this so much!