Many voters are scared these days that the government is spending money way beyond its means and that soon our country will be bankrupt, unable to pay its bills and therefore bad things will happen.

Perhaps our monetary system would even collapse.

I’d like to suggest that the situation is a bit more complicated. Money by itself has no value, rather it is only a measurement of the value of something else that we might like to own or sell. This is important because spending or taxing by the government doesn’t change the value of the economy. That value can be increased only by adding more goods, services and ideas.

Taxes take money away from the economy. Take away too much and ultimately we revert to a barter system where goods themselves are traded.

The current budget deficits show that more money is being added than is being taxed away from the economy.

A negative balance of trade means that we are buying more from overseas than foreigners are buying from us. This is not good because foreign businesses are using their dollars to buy many businesses here and ship jobs overseas.

The oft-suggested solution for the government to cut spending would only make the problem worse by taking money out, slowing the economy and costing more jobs.

Much better would be for government to put in place policies to encourage economic growth through education, the development of new industries and new ideas products and services.

This second idea is already before Congress as the American Jobs Act but is being held up because of opposition by some members who say it is another form of failed stimulus that wouldn’t help the economy. I don’t understand that logic.

 

Bill Williamson

Jefferson