Part 3: Answering Previous Questions

Here’s another answer for questions included in a past posting. This one is from October 10th: Issues that matter: The first set of questions were made rhetorically to demonstrate the type of issues that diverts our attention from more important ones.

                    · Charter schools: a right of democracy? Or a tool of discrimination?

                    · Sanctity of marriage; should it be restricted to a man and a woman?

· Wealthy taxpayers create new jobs and should be taxed less
· Illegal immigrants are lawless, and keep unemployed Americans from jobs
· Nuclear energy is dangerous and should be eliminated
· Foreign oil is good for our economy; American oil is even better; drill baby, drill!
· Urban areas contain the users who drag down our ability to expand the economy
· China is buying the American economy; how do we stop this?
· Liberals are tax and spend monsters
· The death penalty is a God given punishment; use it
· Unemployment is the fault of the unemployed; they managed their affairs badly
· Homosexuality is the curse of the modern age
· Foreign cars make American auto companies healthy competitors
· We are a Christian nation; why have we strayed from that path?

Some of these may be important for later discussion, but the blog post went on to establish these as the more important questions needing our attention:

·         How do jobs get created by public policy?

·         How does the economy really work? What are the primary elements of economic theory and how they work?

·         What public policy efforts actually move the economy in one direction or another? We want the factual information, not opinion, please!

·         Is homeownership an ideal our nation should embrace? How well are we doing?

·         How do we measure effectiveness of the education system? If it is lacking, how do we fix it and who pays for it?

·         How do we replace the “oil standard” economy with another energy base? Would this produce more jobs and a more stable foreign policy in the Middle East?

·         What role should religion play in government? Any?

·         If religion is to be kept separate from government decisions, why then do we make laws about homosexuality, abortion and other elements based on religious tenets or dogma?

·         If religion is not public policy to be discussed, then why do we ask candidates about their religious beliefs and affiliations?

·         How diverse is our nation and is that a good thing?

·         Are all terrorists Muslims? Should we be afraid of all Muslims?

·         Is America a Christian nation or not?

I will take each one in order.

1. How are jobs created by public policy?

Various policies are used. The most basic include the following:

• Economic growth policies; these boost economic activity; as long as the activity remains within our national borders, jobs are created; some activity outside our borders create jobs as well, but on a much more limited basis
• Direct hiring of more government employees: regulatory, military personnel, defense systems and support, research and development activity, and much more
• Hiring of non-federal government employees: anything that increases the number of state employees (highway construction, EPA regulations enforced at state levels, teachers and other education programs expansion, public safety support (increased police hiring), public health systems, and much more
• Research and Development projects: these create direct activity requiring job creations, but lead to new industries and major change to existing industries, all of which will lead to new employment opportunities
• Tax incentives which rewards employers to pursue activity which will create jobs
• Monetary policy shifts: lower interest rates often create more economic activity; formation of more public debt (deficit spending) encourages economic expansion, the results of which generally raise tax revenues which eventually repay the deficit used to create the activity; international monetary credits or loans which foster foreign market formations which develop markets for American goods; many more policy devices are available…….

2. How does the economy really work?  The basics were covered in another blog; no need to duplicate here.

3. What actual public policy efforts move the economy in one direction or another? See question 1, above, for part of the answer, moving an economy upward. For moving the economy downward the following would apply:

• Pay off public debt; this shrinks the economy; this is a form of monetary policy whereby the money supply is reduced and slows economic activity
• Cut federal spending anywhere in the federal budget; this action reduces economic activity, increases available labor pool for other employers, lowers wage and salary levels because labor supply is more plentiful than can be used immediately; the policy also reduces economic activity with vendors supplying the government so their incomes are reduced, etc.
• Too much public debt: this tends to inflate the value of money; in rare circumstances it can deflate monetary value, but both conditions are the result of imbalances caused by “too much” of anything, in this case debt
• Many other policies can be cited here; space limits this discussion at this time

4. Is homeownership an ideal we should embrace? Yes. It builds household stability and wealth over the long-term. It is a bankable asset for credit expansion and further supports economic growth nationally. In inflationary times it can be difficult for individual households but long-term it usually works extremely well nationally. In rare times of deflation (current situation) homeownership can be a burden if not a disaster to both individual households and national well-being. How are we doing? Throughout the Clinton presidency household incomes and homeownership data grew steadily. Prosperity surged. During the Bush presidency, home ownership held steady until household income fell. During the latter, homeownership data declined.

I will end this blog here. More questions posed in the October 10^th Blog will be handled in a future posting.

December 6, 2011