US Economy Still Red HotAs most of you probably know, they added another 312,000 jobs in December. Unemployment remains at the lowest level in 50 years. It’s the strongest economic performance since the late 1960’s. And it has defied predictions of imminent recession from mainstream socialist economists. I have no doubt this is due to the huge corporate tax down to 21%, combined with deregulation. Surprise - If you create a positive business environment, you encourage more business. Gardens don’t usually grow in a desert.
I was was reading a recent column in the NY Times by the famous economist, Paul Krugman, where he “proved” that corporate tax cuts had failed, because tax receipts dropped from the $290 billion level down to around $160 billion. That’s a loss of approximately $130 billion in taxes that could potentially be used to fund social programs. What he neglected to consider is that the economy has been growing at 3 to 4%, instead of 1 to 2% under Obama. That means every for every 1% growth in GDP:
US GDP / 100 = $20.66 trillion / 100 = $206.6 billion
A 2% increase in economic growth translates to $413.2 billion
That’s extra money in consumers pockets. This is the equivalent of 8.24 million jobs at $50,000 a year. They no longer need free handouts from the government, because they earn a decent living from work. Which means you can start slashing government spending. The government doesn’t need to raise taxes. They need to cut spending and maintain forward momentum.