June 22, 2011
Do We Need to Raise Taxes?
By James Wilson

Quote of the Day: On average, eliminating the job of a single regulator grows the American economy by $6.2 million and 98 private sector jobs annually. - Phoenix Center (.pdf)

I sent the following letter telling Congress to cap the debt.

The hard-wired message says simply:

 Do NOT raise the debt ceiling.

To this I added the following letter, which you may borrow from or copy . . .

Despite media propaganda to the contrary, more than half of Americans understand that the economy will be HELPED if you balance the budget by cutting spending. They also believe raising taxes won't work.

This is common sense . . .

* Taxes take money that would be used for savings and investment; this hurts business expansion and kills jobs
* Taxes pay for government spending, and government spending CREATES unemployment!

This is because . . .

* Government has no profit-and-loss statement, and therefore can't spend money as efficiently or wisely as the private sector
* Government workers therefore tend to be higher-paid but less productive than private sector workers

This means, for example, that $750,000 in tax dollars might pay for ten $75,000 government jobs, but could have paid for fifteen $50,000 private sector jobs.

Look at the history. In 2009, before the Stimulus passed, Brian Wesbury charted data going back to 1960. When government spending was high relative to GDP, unemployment was also high. But when government spending was (relatively) low, unemployoment was lower.

(The one exception was in the late 1960's when spending was high and unemployment was low -- but we had the military draft.)

The trend continues . . .

* Spending is at 23% of GDP, and unemployment is at 9%
* Economists Bill Conley and Bill Dupor estimate that stimulus spending saved or created 450,000 jobs, but destroyed or forestalled ONE MILLION private sector jobs

I believe that if we slash spending and balance the budget, jobs will be created!

The best way to absorb the shock of spending cuts is to eliminate many regulatory agencies and slash the budgets of the rest. A study from the Phoenix Center shows that . . .

* On average, eliminating the job of a single regulator grows the American economy by $6.2 million and creates 98 private sector jobs
* Slashing the regulatory budgets by just 16% will create 3.7 MILLION jobs per year for the next 5 years!
* Imagine how many jobs would be created if most federal regulatory agencies were eliminated and others saw their budgets slashed!

Eliminating costly and harmful regulations will make it easier for businesses to hire and for laid-off federal workers to integrate into the private sector. This means . . .

We CAN cap the debt, AND create more jobs. We do NOT need to raise taxes.

Hold firm on NO debt increases and NO tax hikes!


You can send your letter using's Educate the Powerful System.

You can catch more updates and information on this issue by "liking" our Facebook "Cap the Debt" page:  

And check out this related post at the Downsize DC Foundation: "Free Market Regulation vs. Federal State Regulation"

James Wilson
Policy Research Director, Inc.

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