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Erroneous assumptions



In discussing erroneous assumptions, Doug Rixmann makes one in his Jan. 6 Gazette letter ("GOP not economically selfish").

Although often repeated, lowering taxes does not generate growth nor increase revenue. Reports indicate this, but the conclusion is obvious. Removing money from circulation or increasing the cost of borrowing money do lower growth and are the mechanisms used by the Federal Reserve in the past but doing the opposite currently to promote growth.

Our government spends the tax revenue as it comes in and does not save any, not even Social Security funds that it should save. The government buys materials and services from the private sector and hires some people to provide services. This money is injected back into the supply and also provides jobs both in the private sector and for those it hires directly. Money spent overseas is not readily returned to our supply, thereby inhibiting growth here. But we individually spend a lot more money for goods elsewhere than does our government.

So stop thinking about lowering taxes that will only increase our governmental debts and start trying to spend less money outside of our country. That would include unnecessary wars.

"Chadwick Cox

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