The Presidential Race, Economics, and Dependency

Posted by Lorren on October 16, 2008

There’s a big difference in the economic policies of the two presidential candidates. Obama wants to help the “middle class”, McCain wants to help the businesses, who in turn can help the middle class. Joe the Plumber, I guess, fits into the category of “upper class”, because he’s one of the people that would be hurt by Obama’s new tax policy.

Now, if Joe the Plumber owned a business today, then he could go out and hire new apprentice plumbers. That would help Joe’s company grow, and Joe could go hire more plumbers, or maybe expand into piping or something (I don’t know much about plumbing, other than we had to use a snake to extract a diaper my daughter tried to flush down the toilet once). Joe might be doing pretty well for himself… but so would the other employees that he’d hire… maybe he’d have 5 other plumber employees and a receptionist. That’s seven people doing well.

But let’s say that Obama gets elected, and Joe’s taxes increase. Maybe he’s got 3 employees now. He was going to expand, but now his taxes are increased, so he can’t afford to hire any more plumbers. Other businesses are having trouble, and not as many people can afford plumbers… they go to the library and check out do-it-yourself books instead, and only call a plumber in the most dire of circumstances. Instead of hiring more employees, Joe has to lay one of his employees off. Now, instead of seven people doing well, only 3 are.

The rest of the money is given to the poor and underemployed in the form of tax credits. Maybe they get $1000 credits each, on average. Let’s say that Joe’s increased taxes add up to $10,000. So 10 people would be helped through tax credits, instead of the 4 people that would have been employed without the additional tax.

Is 10 people being helped better than 4 people having jobs? Those 4 people would probably pay taxes as well though. Plus, money given to you by the government is not equivalent to money you earned through a job.

My husband is helping his friend start a company. He’s not really an official employee… my husband receives compensation by being allowed to use the company credit card to make purchases and pay our bills.

There’s a big difference between getting a $2200 check and being allowed to spend that much on your company’s credit card. There is no monetary difference, but there is a difference between the freedom you have.

If someone has a job and you pay them, they can spend their money as they please. You can save it, you can buy necessities with it, you can pay for your child’s gymnastic lessons. You are responsible for spending your money wisely, and if you spend it foolishly, it’s your problem. It’s also your freedom to do so.

But when someone else pays for your needs, they have, to some degree, the right to criticize your purchases. Do you really need to put your child into gymnastics? Did you have to buy music for the church? Could you cut back on this? Your spending habits are under greater scrutiny.

The government already gives out a lot of help. In these rough economic conditions, they’re giving out more help than normal. If you’re truly needy, there are avenues to get assistance… WIC, food stamps, social security, Medicaid… our state has a health insurance program that is very nice, although it’s sometimes a pain to apply for. Are there problems with it? Sometimes. If you are divorced or have a blended family, it makes it harder to sort through, and I know some people that probably should have qualified but didn’t due to complications.

Since there is some help already, why do we feel the need to expand the programs at the expense of those that are still economically healthy? Wouldn’t it be better to encourage economic development and give people the tools to earn money that they can spend without scrutiny, than to encourage economic dependence?

I’d rather have the freedom. Perhaps getting an extra $1000 in your tax check would be nice, but a better job is better. Doing for yourself is better.