You Decide Essay

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You Decide It is my recommendation that the President should leave interest rates where they are, raise taxes and increase government spending. Interest rates are tied to consumer borrowing. If interest rates are low, people will borrow more money. More money will be spent than normal. Since the rate of inflation tells us that overall prices are falling, we should allow this area to level off on its own. If interest rates are lowered even further and too much money is being spent with not enough goods supplied, prices of goods will increase thus causing a rise in the inflation rate. It is important to have a healthy tax rate to keep the economy at healthy levels as well as to keep the unemployment rate in check. While it is commonly believed that taxes should be lowered during a time of recession, this may not always be the case. Past numbers have shown that “…higher marginal tax rates generate more resources for the job-creating, wage-generating public investments (roads, bridges, broadband, etc.) that sustain an economy” (Sirota, 2010). Higher taxes also “…create economic incentives for economy-sustaining capital investment” (Sirota, 2010). As more money flows into the government from wealthier tax payers, the government can then turn around and infiltrate the funds back into the economy through an increase in government spending. The increase in government spending will help to establish government programs such as unemployment insurance and create new social programs. References Sirota,D. (2010, July 8). Are low taxes exacerbating the recession? Retrieved on June 9, 2011 from

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