Donkeys and Elephants, Economically Speaking

How the economy works.

• Companies make jobs.
• Jobs pay people.
• People buy things from companies.

Republicans say:

• If companies don't make money they will fail.
• If companies fail, their employees will lose their jobs.
• If they lose their jobs employees will not have money to spend to buy things from companies.
• If people don't buy things from companies, more companies will fail.
  

Democrats say:

• If people don't have enough money they won't buy things from companies.
• If companies don't make money they will fail.
• If companies fail, their employees will lose their jobs.
• If they lose their jobs employees will not have money to spend to buy things from companies.

See any similarities?

The main difference in economic philosophy between Dems and Reps is that Republicans think protecting companies is the key and Democrats think helping individuals the most important.

Republicans think that giving tax breaks to big business will allow them to be more profitable, growing their business and thereby creating more jobs. Pour money in at the top and it will trickle down through the economy. When the fat-cat CEO of Exxon makes more money, he will buy more Big Macs and create new jobs at McDonalds.

Democrats think that you shore-up a shaky economy by building up the foundation, the hundreds of million individual bricks upon which the economy is built. They favor reducing taxes for individual taxpayers, giving them more money out of each paycheck to spend in the market. If I pay $20 less per week on taxes I will spend that extra money buying Big Macs for me and my family, preserving the job of the teenager in the paper hat behind the counter so that he too can do his part to support the national economy.

By the way, $20 per week is about $1,000 per year; That's how much most people will end up saving from a middle-class tax cut.

Both plans have merits and flaws. The Republican's plan makes sure that companies are profitable, but doesn't insure that employees share in the wealth. Companies can also become more profitable by moving their jobs to India, increasing Chicken McNugget sales in Indian McDonalds (where they don't eat beef), but doing nothing to help the American economy. The Democrat's plan gives individuals more money to spend, but if they spend it all on Big Macs instead of spending it on a car payment then the auto industry will suffer anyway and the downward spiral continues. Is that extra $80 per month enough to convince Mr. Burger-Flipper to finally buy that new Ford Focus? Is there any way to compel him to do so?

While neither solution is perfect, I have more faith in the American worker to solve this problem from the bottom up than I do in American Big Business to solve it from the top down.