There seems to be some confusion in DC about why unemployment is over 8 percent despite the timely passage of the “stimulus” bill, so they are forming study/focus groups to figure it out.

I have a solution; elect a new Congress that knows how to stimulate real economic growth.

Some misguided souls believe that creating government jobs actually stimulates the economy. Overall, the government requires money to operate and to hire people. Without some way to generate a profit, the government needs to get money from somewhere else. Anyone employed by the government, and any service it provides, is paid for with taxes that originate from profits that are created by business. Your salary, if you work in the private sector, is paid for out of the money created by your hard work. If you work for the government, your salary is paid for by the taxes generated by the private sector. Yes, you pay taxes if you work for the government, but that is not money created by the government. This concept seems to be lost on many people in the upper levels of our government and academia.

Anyhow, now that we have established that the money we have comes from the profits of business, we can focus on how to encourage growth. The simple answer would be, hey, let’s just tax business more and use that money to pay for health care, defense, and whatever else, maybe even create more government jobs. Basically, that’s what we are doing here in Oregon with measure’s 66 and 67. Nationally, that’s what we are doing with Cap and Trade. And, if you think government health care will be free, no, it too will be funded by taxes. Also, the expiration of the Bush tax cuts this January may not be an official tax increase, but it will sure create the same effect, and you will feel it in your pocket book.

Unlike the government, if a business does not generate a profit, a few things will happen. If nothing is done, the business will fail, everyone will lose their jobs, and no money will be sent to pay for the government. Business people are very competitive and do not give up easily so they will do things to keep their business afloat. They will look for ways to make the company more efficient and, in the worst cases, they have to start cutting payroll. Small business accounts for most of the jobs in this country and I can tell you, small business owners don’t often hire people they don’t like. So when they have to let someone go, it isn’t an easy thing. It isn’t a greedy thing; it’s something that has to be done in order to allow everyone else to keep their jobs.

When we raise taxes on small businesses, who often occupy the tax brackets of what some call “the rich” (because they report their business revenue on an individual tax return), we are directly cutting into the profits of businesses that are used for things like payroll. If we attack businesses in this way, we give them no choice but to cut costs. It’s that simple, and it sets off a spiral which ends up not only causing lost jobs, but over time, results in less revenue for the government. Combine a tax increase with a down turn in the normal business cycle, and you turn a recession into a depression. You create a stagnant economy and the only way the government can make ends meet is inflation…or make our money worth less. Inflation is similar to cap and trade because it will hurt the poor and those on fixed incomes the most, it is regressive. Anyone remember the term “stagflation”?

So what do we do? We need to take some immediate actions. First of all, we need to replace these “tax and spend” politicians on both sides of the aisle as soon as possible. We’ll start in the House and Senate, and then we replace the President if he still doesn’t catch on. We need to do the same house cleaning here in Oregon as well. We need to stop the attacks on small business. We need to stop measure 66 and 67. Cap and Trade needs to be stopped. Expensive government run health care needs to be stopped (although I am not against certain reforms). We need to stop government growth and reduce government where possible. By the way, cutting the percentage of growth is not a “cut” in my book but it is to this Congress. Most importantly, we need to look at helping business by cutting their tax burden.

Some say if you cut taxes, you will then not have enough money to pay for government. I say, cutting taxes will result in growth and more revenue. Looking at history, I see two times when we tried this. President Kennedy and President Reagan both cut taxes and in the following decade, generated growth that actually raised revenue. As I said in another tidbit, the money pie is not a fixed size. If we want a bigger piece of pie, instead of taking more pie from someone else, you can take steps to make the whole pie bigger. That’s what I’m saying here. That’s why I am in this, because I’m tired of people on both sides of the aisle not practicing fiscal responsibility.

We must resist policies that attack the engine of our economy; small business. Rather, we must support small businesses and put policies in place to help them succeed because they are the ones that butter our bread.

Join the Resistance.