If the Chinese economy doesn't pick up soon, the oil prices will jump all over the place like a man with fire crackers tied to his feet. What we need is stable prices, even if they are high. The big concern is Ford and General Motors struggling to sell cars, a million Americans are out of work. We need tax cuts for the lower income groups who will spend the money immediately. Rich people don't spend tax cuts, they invest in more income earning assets that will make them even richer. We need a boost to spending in the economy, so that demand picks up and employment opportunities re-appear.
Credit card debt is a huge problem, but banks make it harder by "pushing credit" onto anyone they can get to sign up. There are about 6,000 credit card companies competing to sign you up. We need credit card interest IMMEDIATELY slashed to 10% max by Federal intervention, and an incentive system to encourage people to slowly reduce their overall indebtedness according to their individual circumstances.
If people get scared and stop spending, 50 million people would be out of work in a month. In an economic melt down, we need money to be still circulating to keep people in work. Without demand, there are no jobs, and house prices will keep tumbling.
If people stop spending, Doctors, Dentists, Lawyers, Accountants and Bank Managers won't have a job. So giving a tax cut to those who will spend it on consumer goods, means that the economy gets a boost to kick start it off again. Slashing credit card interest rates will kick-start the economy which will provide more sales tax revenue for the government.
When tax cuts are made, the "multiplier affect" is calculated, and often the affect of the tax cuts is that the Government receives most of it back in extra sales tax on more goods sold. The problem of giving tax cuts to the rich is that they don't help to kick-start the economy by immeditely spending.
In the 1930's depression when Bnk Managers got blisters on their hands working on roading projects, an overseas country broke the depression by doubling the price it bought milk off the farmers to export. Immediately, the farmers could pay all their bills on time and there was a flow on affect as more and more people could pay their bills. Within months, new jobs sprung up all over the place like a snowball - and the economy came right.
No one hs been ble to tell me why people who earn over $250,000 per year can't afford to help the economy at the moment by paying a bit more tax. Especially if it will help get America out of its crisis. In good years, the rich will "continue to cream absurd profits" compared to those on the factory floor. I have not met a rich person who would be prepared to work for factory wages - it tends to be below their dignity.
