How to stimulate the economy
So, let’s think for a minute about a stimulus bill. The economy is growing, but at a very slow pace. How to bump it up? Raise taxes for a massive stimulus? Fat chance. Bigger tax breaks for the wealthy? Proven ineffective. So how about a stimulus that doesn’t cost any taxes, in fact adds to the tax base?
The way I see it, a man who gets paid $40 million a year, if he gains a million, or if he loses a million, will not change his lifestyle one whit. But a full-time worker who gets minimum wage makes about $16,000/year. At 2,080 hours a year, a $2/hour increase brings him up to about $20,000. He pays more into Social Security and Medicare funds, buys more shoes and socks for his kids, maybe some storybooks. Maybe they even play some miniature golf now and then. Maybe he can give up his second job and take some classes, making his part-time job available for someone else; especially if his spouse also works for minimum wage, which is often the case. There might be trips to the dentist, a fishing pole, some gas to get to the lake. Perhaps they will no longer need food stamps, thus saving the taxpayers some money.
After a while, he and his spouse might decide it’s time to save some money, even if it’s only a hundred or so per year. If he can manage to save a little, that money will not go into a bank in Belize, but right here into his local bank or credit union, where it will be lent out to his neighbors for business start-ups or home mortgages. Because all of the businesses are now paying more, all of the minimum wage workers are now earning more money, and all of the businesses are doing more business. More jobs are created. So here is a major economic stimulus with no tax money. And as I said, the members of the Walton family won’t have to change their lifestyle one whit. Some will scream that this is a redistribution of wealth, as if that were a bad thing. I maintain that a constant, healthy redistribution of wealth is good for a vibrant economy.