On CNN today I watched a speech by Sen. Biden. As he talked about the economy he brought up some important issues. The main issue I would like to outline is concerning Sen. McCain's economic plan. Sen. Biden mentioned that McCain plans to cut taxes for the wealthy, hoping that it will drip down to the rest of us, and that the wealthy will take care of us. This is the old school logic of Sen. McCain. He believes in cutting taxes for large corporations so that they will be inclined to keep jobs in America. The problem with this line of thought is that it has been tried and failed, time and time again. It is time for a change! It is time to try something new!
Sen. Obama proposes cutting taxes for the other 95%. The middle class working Americans that truelly need the money. This money will help people pay there heating bills, pay for gas to get to work, and help put food on the tables of families across America. In order to accomplish this the taxes on the top 5% will have to be raised, raising corporate taxes, and raising taxes on people making more than $250,000 a year. I call this "Drip Up Economics". The idea is that you will take the money from the top earners and spread it around to people who need it. Some people believe that this isn't in the best interest of the wealthy and corporations, but that is where they are wrong.
Cutting taxes for the wealthy and corporations may be in there best interest during the best of times, times of economic growth when there earnings are soaring. But cutting there taxes during these difficult economic times does very little because all you are doing is taxing less from less; they are earning less, so they are saving less. On the other hand, raising there taxes will take more money from them when they are earning less. Which sounds bad at first, but if you look at the bigger picture and realize where that money is going, it starts to look alot better.
The short term effect will hurt a little for the wealthy and corporations, but as people start to spend the money they recieve, earnings will start to increase. As earnings increase the stock prices will follow. As stock prices increase, and economic growth resumes, the wealthy will start recouping the losses they have sustained and eventually see growth from their portfolios once again.
Sen. Obama wants to use drip up economics to save the economy, and I believe it is the only logical path that America can take. Helping the wealthy save money now will allow them to hoard it away untill the good times arrive, but helping the middle class will initiate the good times.
It is time for a change, it is time for President Obama!
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