Today brings more bad economic news as General Motors announces that it is considering another big round of lay-offs and downsizing the number of brands that the company builds. This comes as mounting consumer debt forces an increasing number of mortgages into default.
And it’s not just the subprime sector we’re talking about any more.
Individuals are buried in debt, corporations are writing-off big losses, energy prices are exploding, the dollar is weak… at some point things will have to give into the pressure. Government rebate checks that do nothing but dig the government into an even deeper mound of debt are not the solution. There’s nothing Barack Obama or John McCain or George Bush can really do to stop it at this point… the next 2-3 years are going to be bad.
The only question is, will there be a recovery come 2011? Or have we hit an economic wall that we’ve never experienced before? Frankly, I’m not so sure what will happen unless some fundamental changes are made in the way Americans deal with debt, and the way the government spends our money.
July 7th, 2008 at 6:36 pm
One way to get this engine kicked back into gear would be to get rid of the income tax and institute the Fair Tax.
Right now we punish people for being successful. Basically, the more I make, the more I have to pay. The less I make the less I have to pay. So we are actually rewarding failure through our tax system.
We are also helping make the choice for companies to relocate overseas an easy one as well.
July 7th, 2008 at 6:57 pm
Well, if the value of the dollar keeps sinking we might not have to worry about the companies moving overseas.
July 7th, 2008 at 7:17 pm
That’s just it, the Fair Tax would bring the value of the dollar back up.
July 7th, 2008 at 7:28 pm
Interesting… how does it accomplish that?
July 7th, 2008 at 9:20 pm
Well, first off it will stop rewarding failure, so now people would actually be making all of their money. On top of that we, the U.S., becomes a tax haven. This will bring more companies back to the States. More companies come back, more money starts to circulate, dollar goes up.
July 7th, 2008 at 9:45 pm
How can you classify a new vs a used item? FT seems too easy to get around esp if its possible to save 10% or 15% by doing it on a big item.
July 7th, 2008 at 9:53 pm
Also what about exports?? Seems like a tax overall would hurt if we were jacking prices up by taxing.
July 7th, 2008 at 10:24 pm
I’ve heard the new vs. used arguement before as a failing of the Fair Tax, but I honestly don’t know enough about it to speak to that point. But I do believe it’s just a tax on consumers, if I understand that part correctly. So I don’t think exports would be taxed.
July 7th, 2008 at 10:25 pm
Mike, the Fair Tax would replace taxes on corporations as well?
July 7th, 2008 at 10:47 pm
It would replace the current tax system at the Federal level. It would only apply to goods and services at the retail level. So, for Yolanda, you would classify new vs used the same way you do now. Also people get around the current tax system. You can’t get around that, people will cheat no matter what the system.
Austin, yes it would get rid of taxes on corporations as well. That is what would bring them back.
I’m going to have to go back to the book store and get another copy of the Fair Tax book (my last copy was lost before I was deployed). Remind me and I’ll bring it to you next time I see you.
July 14th, 2008 at 2:59 am
You guys are funny…
Talking about different forms of taxes to get the economy moving…
You guys need to look deeper. You need to look at the federal reserve.