Common ground on how to grow the economy
Some extra land was discovered Tuesday night within the 3.79 million square miles of the United States. It was the common ground found during President Barack Obama’s State of the Union address.
The president proposed raising the federal minimum wage from $7.25 per hour to $9 an hour by 2016 and linking future increases to inflation.
Obama argued this could benefit employers.
“For businesses across the country, it would mean customers with more money in their pockets,” he said during the speech.
His logic is this: Business owners would get a boost from the economic impact that would result from putting more money into the hands of more Americans.
This is the exact argument conservatives are making in regard to lowering tax rates. This is the common ground.
There’s another aspect to the president’s stance.
“Corporate profits have skyrocketed to an all-time high,” Obama said. “But it’s also true that for more than a decade, wages and incomes haven’t gone up at all.”
Yes, American businesses earned profits at an annual rate of $1.659 trillion in the third quarter of 2012. Assuming that pace held for the rest of the year, corporations were in a position to dole out more than $1.6 trillion to shareholders – minus any reinvested in the businesses.
That third quarter ended Sept. 30 – when the current federal fiscal year began. During the most recent federal fiscal year, the federal government grabbed about $2.6 trillion in tax revenue from American workers and businesses. It also spent $3.7 trillion – which would have been an all-time high, if not for the amount spent the year before.
So, we can agree that getting more money in the pockets of Americans would be good for the economy, not to mention the citizens. But how should that be accomplished? Get employers to raise wages? Or reduce tax rates?
Consider this question another way. Who do you think maked better choices with money: the folks who invested in Apple, or those who invested in Solyndra?
And have you, dear reader, ever purchased a $600 hammer?