Wednesday, January 26, 2011

State of the Union Address

In President Obama’s speech Tuesday night he said that America’s economy is improving "Now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in. That is not sustainable," he said. He proposed a five-year freeze on nondefense spending that would reduce the nation’s debt by more than $400 billion over the next 10 years. He agreed to work with congress on deeper cuts in the budget, and he vowed to veto bills with lawmakers' pet projects. He also promised a simpler tax code for small businesses. He wants Congress to eliminate the billions in subsidies to oil companies and to eliminate any tax breaks for the wealthiest 2 percent of Americans. I think that tax loop holes should be eliminated for all Americans if that is what he meant by tax breaks. If he meant that the wealthiest should pay more taxes, well then I disagree. Why should the wealthy pay a higher percentage just because they have worked hard and made a lot of money. If there was a flat tax rate, the amount the wealthy pay would still be higher just because of the math, but they should not have a higher percentage rate. We need to remember that the wealthy own big businesses and employ many people. They also spend and invest a lot of money which helps our economy. I found it contradictory that as he is saying this about cutting spending, he also says that the government needs to invest in biomedical research, information technology and clean energy technology. His goal is to have 1 million electric vehicles on the road by 2015 and 80 percent of U.S. electricity from clean energy sources, including nuclear and clean coal as well as solar and wind. These are great goals, but he doesn’t mention how our government can afford it when we need to cut spending. I would suggest that it be left to private industries to develop and market these things. I don’t understand why it is the government’s job to do this. Let these private companies profit from new technology so they can then employ people, become wealthy hopefully, and put money back into the economy.

5 comments:

  1. “He wants Congress to eliminate the billions in subsidies to oil companies…”

    What type of world impact could this have? Think about how it would affect you, your family, your city, state, country, and the world.

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  2. Does the government have any responsibility to help incentivize or discourage certain industries? Should we tax cigarettes as heavily as we do or should they let the market take care of it? What about subsidies for farming?

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  3. I think that without government funding things like renewable energy wouldn't get enough of a focus to get off the ground and become something of an every day thing we use. The government funding certainly isn't at a convenient time in our history, but we need it to help push new things such as a better health system and a fast efficient mode of public transportation.

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  4. Smith:
    From what I have read about tax breaks for oil companies it seems that it is extreme. If what I read is true, oil companies only pay a tax rate of 9% which is significantly lower than most businesses that pay 25%. I do think tax breaks are important though because they are a good incentive for a business to stay. For example, if Texas gives oil companies a better tax break than other states, then an oil company is more likely to open their business in Texas. This helps Texas because it employs people and increases spending in that area. If the American government does the same thing, then oil companies won’t be as tempted to do their business if foreign countries and will add to the economy here.

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  5. Kern:
    I think that having consumers interested in buying a product and profiting from its sale should be its own incentive. Research and development should be done by car manufacturers on ways to save fuel with car design because fuel is in short supply and because consumers want more fuel efficient cars. It shouldn’t have anything to do with the government. Profits will be their own reward. They should qualify for tax breaks just as the oil companies do so I guess that could be their incentive. As far as the cigarette tax, I would like to know what specifically that tax money is being used for before I can answer that question. Farmers should be subsidized because it is so hard for farmers to make a living that if they are not subsidized, no one will be able to afford to be a farmer which would affect our food supply drastically.

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