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Fix the Economy.

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posted on Nov, 20 2009 @ 10:14 AM
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I thought of a potential solution to the economic problem. The dollar is way too inflated, things cost too much, the government wastes money, etc. What if the government simply raised taxes and lowered the cost of everything significantly, to compensate? The government would be bringing in more money (to spend wisely
), and the value of the dollar would skyrocket. Would this work, or am I just blowing gas?

Thoughts. Comments. Flames (but not too hot)




posted on Nov, 20 2009 @ 11:34 AM
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I appreciate you thinking critically on this issue. More people need to do it. However, there are three fundamental problems with your solution. I'll spare you the technical explanation and just give you the simplest reasoning so that you may better understand:

1. In the United States the government has little control over prices. Prices are largely set in the market through supply and demand. It would be difficult and very costly for the government to lower prices.

2. The dollar isn't "inflated" (although I suspect you mean depreciated) because prices are higher; rather, the prices are higher because the dollar is depreciated! The value of the dollar is also set by supply and demand. There is an ever increasing supply of dollars (since the Federal Reserve is constantly printing them); the U.S. dollar depreciates when the supply grows faster than the demand for dollar.

3. Raising taxes is not a solution for the government wasting money.

Again, I appreciate your thoughts on this subject, but I do recommend that you learn the fundamentals of economics. The U.S. government is failing utterly to teach its citizens economics through the public school systems. I'm not sure if that's by design or not; in either case, the current economic crisis would not be happening if Americans had a better understanding of economics.



posted on Nov, 20 2009 @ 11:43 AM
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reply to post by OrphenFire
 


I'd give you a nice reply, but the dude above me got it all.

Dollar is Deflated not Inflated.

Taxes hurt the economy by further Deflating the monetary supply.

US Gov has almost no effect on pricing. That usually has something to do with the Dollar, which printing Dollars could cause further deflation (without wage growth)



posted on Nov, 20 2009 @ 12:26 PM
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reply to post by randolrs1
 


Hey thanks!

Actually I have no education in economics. My school didn't offer an in depth study of economics. There was a joke of a course called "Government and Economics", but like I said, it was a joke. My OP is based on limited knowledge of our money system. It was basically a quick thought that occurred to me. Thanks for clearing up those issues for me
.




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