The unemployment rate is an indicator on many people's radar right now. The federal reserve is suggesting that they have a target number to convince them the "recovery" is for real. Until then Ben Bernanke seems determined to live up to his nickname of "Helicopter Ben". He will drop magic fiat currency from the skies. Or so it would seem.
The president has vowed to "tax the rich" in his effort to do something about the massive national debt. His number to determine whether someone is "rich" or not appears to be in the the $200,000 income level per year, depending on marital status. I believe that number will change upwardly as some compromise is sought. But for sure it will be income specific.
That income distinction is very important. I'm not sure if he is really hitting the actual rich using that income criteria. Most truly wealthy people keep their fortune in assets and show as little actual income as possible. Many very wealthy people only pay themselves a relatively small yearly income.
A great book on this subject would be, "The Millionaire next Door", by Thomas Stanley. He details how many millionaires would never be evident by watching their lifestyles. He will teach you some great ideas for building wealth by using the methods proven to work by the people who used them to succeed.
Another great book by the same author is called, "Stop Acting Rich." He shows in this book how the high income earners in our country actually spend much of that income on lifestyle. These are the people that are squarely in the cross hairs of this new tax the rich plan. They show the high taxable income, so their taxes would go up sharply.
It would seem pretty obvious that this group's next move would be to drastically cut their lifestyle purchases. Things such as expensive new cars, long vacations and high end dining.
Which in turn will lead to a large loss in service industry positions. And then the loss will spread to positions affected by other items these folks would usually buy. How is that helping to lower the unemployment rate?
Another part of this high income group would consist of small business owners. Piling on more tax burden will force them to cut back as well. Another hit to the unemployment rate.
Of course the debt needs to be reduced. It has been out of control for decades through administrations of both political parties. They've changed the way the numbers are computed now to make it look better than it really is, but even with fudging it still looks bad. The two party system has a stranglehold on the controls.
It would seem to be more appropriate to focus on working to develop a truly growing economy. Not one based on consumer spending alone. But one that is based on sound fundamentals. Like actually building things that people need. Let the private business owners build their business entities and growth will appear. Jobs will be created. The unemployment rate will go down.
The government's job is to defend the constitution. They should create a climate to encourage business to seek it's own level. The good ones will rise to the top. The federal government poured millions into solar energy companies. Now I believe the time will come when solar power is a major energy producer in our country. But not until the demand is there. Then private industry will invest in solar power and do it right. Those government millions were wasted. And those millions were our tax dollars.
But for now, we have opportunities right now to expand our own well known natural gas reserves. These home grown jobs will create even more business growth. Which will create more income. Which will grow the economy. Gross domestic production is dependent on actually producing.
That sounds so obvious that it is almost laughable. But in the past decade or so, we have moved from a production driven economy to one based largely on spending.
"Tax the rich" is an old political gambit designed to take the focus off the real problem while giving the illusion that the government is doing something. Sort of like welfare reform. Through all the reforms we have massive numbers of people on welfare.
Let business people run their business. They will hire employees to build stuff. The unemployment rate will go down. The national debt will go down. Gross domestic product totals will go up. It isn't rocket science. Let the people who know how, do what they do best.
I would suggest you get a copy of the classic business book by Robert Kiyosaki, "Rich Dad Poor Dad." It will help you understand the four income quadrants and how they relate to our economy. Knowledge is the new money. Maybe together we can make positive change become momentum. That is how good change has always come about.