The votes are in and the people of the United States have spoken; President George W. Bush was re-elected for his second term in office. In his first term, he was concerned with the nation’s economic growth and this concern remains consistent, if not stronger for his economic plans during his second term. Bush wants the economy to grow and create jobs by proposing tax cuts that will stay and help bring money back to America’s economy. His aspirations for his new term will be effective because the economy is reviving with growth from his last term. Bush has helped the economy in the past four years, and there is no doubt that he will be able to continue to do so. He promised to build on the accomplishments of his first term by building a safer world and creating more hope for America for our workers, families, and children. Not only is Bush promoting tax cuts, but he also will not be satisfied until each and every American who wants a job will be able to find one. With the job market growing, Bush wants businesses to grow too.
Bush would like to continue economic recovery into prosperity in which the people will feel the effects of it now. By learning about Bush’s proposed economic plans, one can see how his plans can be related to the subject of macroeconomics. A rising concern is America’s debt. Bush came into the presidency at a rough time. The September 11th attack put the economy in a huge deficit. Millions of dollars went into the necessary war with Iraq and the economy will be paying for it now and in the years to come. Bush wants to rebuild the economy. Money is being cut from our education, recently the California school systems, to pay for the war. Bush believes he must help reconstruct the economy and not allow the “invisible hand” in the economy by imposing new taxes. The economy was at one of its lowest points because of the war, but Bush’s new proposal to help the economy recover will help rebuild our economy.
Prices start at $12
Prices start at $11
Prices start at $14
Prices start at $12
Bush wants to emancipate America from the income tax and propose the national sales tax. A national sales tax would be very beneficial and help the economy now. The national sales tax will replace the individual and corporate income tax, the capital gains tax, the estate, and gift taxes, and non-trust-fund excise taxes all could be replaced with a national sales tax (NST). The NST would spare low-income Americans from tax and inflate the same amount of revenue currently collected. The NST will be similar to the state sales taxes. We would eliminate the IRS by imposing a 15 percent sales tax on the final purchase of retail goods and services. Thus, the IRS would be abolished leaving less responsibility for the government, and the excise taxes and payroll taxes would be collected by other tax collecting administrations. Bush believes in growing and his new plans for his second term will formulate and grow from his last. In order to strengthen the American economy, Bush’s new proposal would “speed up the 2001 tax cuts to increase the pace of the recovery and job creation” (President Bush’s Agenda for Building a Safer, Stronger and Better America, Republican National Committee).
This plan of action is effective and beneficial for everyone because everyone pays taxes. In his latest tax cuts, many Americans opened their tax returns and found that they were getting a substantial amount back. Bush believes it is best to help the economy now and that is just what he did. Why not help the economy now instead of waiting for ten years? Americans need to feel the effects now and get help now. With reducing tax, the elimination of the double taxation on dividends comes in stride. In reduction to this tax, everyone who invests in the stock market will benefit, especially seniors. If Bush ends the double taxation of dividends, then research shows that “Average tax savings for the 9.8 million seniors receiving dividends would be $936. The president’s plan would eliminate the double taxation of dividends for millions of stockholders- allowing taxpayers to exclude dividend payments from their taxable income- and returning about $20 billion this year to the economy.” The seniors would be reaping the benefits and it is these seniors who will invest this money back into our economy. With the baby boomers reaching their elder years, they will soon be in need of retirement money and resources like Medicare.
Double taxation is outright wrong because it falls hardest on seniors. The baby boomers will become seniors soon enough, and with Bush’s plan, they will have a sufficient amount of economic aid and help that they need. This is a great plan because if we help our seniors now, as the generations pass, everyone will eventually benefit. Another huge aspect of the President’s plan is to prompt growth in small businesses and encourage job-creating investment by ending the double taxation of dividends thus creating a bigger market for people to get jobs. The American dream is to make a substantial amount of money for themselves and make a living, but how can one do that who cannot find a job? A competitive market is a market in which there are many buyers and many sellers so that each has a negligible impact on the market price, which relates to the competitive job market. There are not enough jobs and we are left with many people that need to be employed who impact our economy. With Bush’s plan, there will be more jobs and the market will be the demand for the employees competing for jobs.
Bush wants to give all Americans who want a job a chance at getting one; this would be only fair because we all need to make a living and to not give someone an equal opportunity to get a job would be wrong. For the struggling men and women in search of a job, the President’s plan would help the unemployed short term and long term. By proposing to extend unemployment benefits, the 70,000 workers who exhaust their benefits each week can get the needed help they seek. Bush also wants to create new personal re-employment accounts. “These accounts would provide unemployed workers with up to $3,000 to use for job training, child care, transportation, moving costs, or other expenses associated with finding a new job. A person who gets a job within 13 weeks will be able to keep the leftover funds from their account as a reemployment bonus.” This will help them when they are looking for work and give them an incentive to find work faster. Incentives are always around in the economy and always have an influence on people, in this case, your average employee.
Basically, Bush wants to make sure there are no excuses for job seekers and uses the incentive of them keeping leftover funds as a “sales pitch” that would prompt people to become reemployed as soon as possible. Unemployment relates to macroeconomics because it is like the concept of supply and demand. The demand is for a job market and the economy is lacking a sufficient number to offer. Our demand is greater than the output of the supply. Bush’s plan will help create equilibrium in the workplace. Bush wants job seekers to be able to find jobs. Employment and the workplace obviously are the milestones in our economy. They are big factors in keeping our economy literally running. Bush’s plans are working because our economy is recovering and our trade with other nations is expanding; it is bringing the lower prices that come from imports, and the better jobs that come from exports. Bush wants Americans to be able to find jobs with more ease and be able to support themselves even if they are unemployed, which is why increasing incentives for small businesses to grow will help the job market. Small businesses create a vast majority of new jobs thus helping with the output of the economy.
Individuals and businesses will be prompted to invest in America’s economy if they can maintain their businesses with low taxes imposed. Bush will permit these businesses to write off up to $75,000 worth of equipment as opposed to the $25,000 that stands now. Small businesses can “better themselves” by buying the latest and newest technology and creating a job market at the same time. Enforcing tax cuts now will speed up the reduction of the marriage penalty, raise child tax from $600 to $1,000, and move several million working Americans into the lowest tax bracket. Bush’s goal is to stray away from deadweight loss from a tax. Deadweight loss is the fall in total surplus that results from a market distortion, such as a tax, thus giving money back to Americans will help strengthen the economy with the tax relief, but the economy is still not creating enough jobs. By speeding up tax relief, it will encourage consumer spending and investment that will help create jobs and model trickle-down economics because everyone will be affected in one way or another with more money to spend or getting a job, etc.
According to a projection by the Council of Economic Advisers, “the President’s plan will help the economy to create 2.1 million jobs over the next three years.” Bush tried to implement the trickle-down Reaganomics in his first term and it is carrying over to his second term. Bush will give incentives to businesses so they can make their businesses more profitable and lure consumers into buying more, which in the end circulates money through the economy; the money will “trickle” down and have an effect on everyone in the market. People respond to incentives. Bush’s strategy to use incentives will work because it is like how Gregory N. Mankiw states in the ten principles of economics, “Public policymakers should never forget about incentives, for many policies change the costs or benefits that people face and, therefore, alter behavior.” Bush will use incentives for small aspiring businesses which will be great in return for a healthy economy.
Bush must be doing something right because an article from the White House reports that, “The economy has posted steady job gains for each of the last fourteen months- creating nearly 2.4 million jobs since August 2003, according to the payroll survey.” Tax cuts are benefiting the economy because they are creating jobs and giving back money to the consumer so in return they will spend it and it will be re-circulated through the economy. Also, as of September 3, 2004, “the economy shows twelve straight months of job gains” (President Bush’s Agenda for Building a Safer, Stronger and Better America, Republican National Committee). One can clearly see that the strong economic growth shows how the President’s policies are working and will continue to do so with his new plans. The taxes Bush discusses are the same discussed in Macroeconomics. Tax Distortions and Elasticities apply, but when you are dealing with a tax on a service that is needed, it makes it become inelastic. Like any economy, people will be forced to pay some kind of tax.
Taxes can sometimes inhibit the growth of an economy because it takes away money in the pockets from those, who if they had their tax money, would have spent it and re-circulated it back into the economy. Bush wants to reduce these taxes that the people must inevitably pay. Bush’s tax reforms have good intentions of helping everyone because they give money back to consumers and the upper class in hopes that the upper class will invest and the consumers will buy. This idea goes along with the concept of trickle-down economics also. The American economy is recovering with the help of Bush. It is safe to say that projections for our Nation’s economy in the future will be well off. The concern about the economy has only improved it. America’s financial system is growing; it is growing into a better economy. With Bush’s plans of action, he will only further America’s economy to continue to move forward.
- Jackson, Gerard. “The American economy recovers-as predicted.” Brookes News7thJune.2004.24thNovember.2004http://www.brookesnews.com/040706usrecovery.
- “Republican National Committee.” President Bush’s Plan to Grow the Economy and Create Jobs. Republican National Committee. 29th November.2004 <http://www/gop.com/GOPAgenda/>
- “Jobs and Economic Growth.” Data Shows President’s Economic Policies Are Driving Strong Job Growth. The White House. 29th November.2004<http://www.whitehouse.gov/infocus/economy/index.html>.
- Mankiw, N. Gregory. Principles of Macroeconomics. Ohio: Thomson, South Western, 2004.
- Burton, David R. and Mastromarco, Dan R. “Emancipating America from the Income Tax: How a National Sales Tax Would Work.” CATO Institute. 27th November. 2004. <http://cato.org/pubs/pas/pa-272es.html>.