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Economy

Economy

Labour was the first price, the original purchase-money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased;
— Adam Smith, The Wealth of Nations

My goals:

  • Strengthen stock market regulations
  • Invest in programs that educate, train, and encourage people to find jobs
  • Encourage free trade
  • Provide assistance to those whose livelihoods are lost to automation and foreign competition
  • Increase the top tax rate in order to help pay down our national debt and reduce income inequality

Since the 2008 financial crisis, we have been slowly rebuilding our economy. Our first priority is to ensure another financial collapse like that doesn't happen again. Banks and the stock market are not inherently bad systems, but they must be properly regulated in order to curb their excesses.

The key to a strong capitalist economy, one that encourages innovation, is to keep money moving. Trickle-down economics failed because it assumed that assisting the wealthiest Americans--those who presumably own large businesses and create jobs--would encourage them to reinvest their wealth into the economy by creating more and better-paying jobs. However, instead wealth simply accumulated at the top, as there wasn't much incentive to actually reinvest that wealth.

As this government study shows, the massive tax cuts to the wealthiest citizens introduced during the Reagan Administration did not result in significantly increased economic activity. Instead, it simply caused our national debt to begin to rise and the wealth in the country to accumulate at the top.

Increasing our top tax rates (taxes that only affect the wealthiest citizens) serves several purposes: it reduces income inequality, which reduces civil unrest; it increases government revenue, allowing us to pay down our national debt and provide more services; and it encourages companies to distribute earnings among many employees rather than concentrating it all on a few who would see diminishing returns as they enter higher tax brackets.

Rather than encouraging the rich to get richer, I believe it's better to focus on the poor--not with handouts, but with programs that educate, train, and encourage people to get jobs and participate in the economy. Our poorest citizens are the ones with the greatest need, so helping them attain income increases demand. Increased demand encourages innovation to improve supply so that it meets demand.

The economics are straightforward, but the details are not. Our economy is constantly changing. Manufacturing jobs are being largely lost to automation, and much of what remains are lost to international competition. Technology and globalization are powerful, irresistible forces that make our lives easier and our goods more affordable. However, they're also forcing us to constantly adapt, and in that process many people are losing their jobs.

Which brings us to an important question: Is it the job of the government to guarantee the viability of a profession?

I don't think it is. We can resist the forces of the free market for a time, but in the end the free market always wins.

That said, I intend to seek ways for us to support those whose jobs are lost to these market forces; people who want to work, but can no longer find work in the profession they're familiar with. I don't have a clear solution to this problem, but I know that it is a problem, and I intend to search for that solution.