Tuesday, March 31, 2009
Social Security As A Stimulus
Click on the title and you'll read of a suggestion to suspend Social Security taxes for a month as an instant stimulus for the staggering economy.
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I personally think that this plan can work, especially if we analyze it from the point of view of those persons that believe that the government is increasing the federeal deficit and it's not helping the economy. This extra money will be used by employees and employers and they will be putting more money into circulation. Even though it's true that this will affect the purchase of Treasury Bonds in the moment this decision is taken, as a long term effect the economy can be greatly improved and we can go out of this huge hole.
ReplyDeleteMariangela Artica.
Although it may seem a productive way to stimulate the economy the article suggests that taxpayers will get a month break to keep their income but when the government wants the money back the American people have to pay up. By altering social security tax rates the government may raise people’s anxieties. Giving the American people a tax break and then taking back the money any time in the near future does not take into account individual’s ability to pay this back.
ReplyDeleteObama’s present strategy for stimulating the economy it is assumed by the GOP will increase the federal deficit. But might not the combination of short and long term stimulus packages generate wealth over the long term and in fact reverse the possible projected deficit? Obama’s optimistic economic world outlook backed up with disciplined, responsible fiscal accountability in his administration may be the deciding factor in reversing this downturn.
Given that the previous administration was reckless with the economy it is conceivable that Obama’s strategy combined with prioritizing of investment and government spending may result in an increased robustness of the countries economic infrastructure. Obama’s current strategies may be of social benefit but may also potentially be revenue generating. If that is true then there is no advantage in helping people this month with a quick fix just to create the problem of repayment in 13 months. By contrast a check through the mail would be likely to have more impact because it would help relieve people’s financial pressure while at the same time boosting morale.
Sarah Prentice