The Best Way to Stimulate An Economy?

It may get very confusing to the general public. You know the U.S. economy and that of Europe’s is in dire need of a boost. And you keep getting two or three main recommendations on how to get the job done. But mostly you hear the points of view of politicians whose stand is usually wrong. Because it’s the one opinion that appeals best to unknowing voters.

The genuine answer is simple, once you refer to evidence of the near and distant past, to see what has worked and what did not. Simple? Certainly. But too simple for vote-seeking politicians to implement.

Monetary policy is important. That has to do, for example with how the Federal Reserve system controls inflation with interest rates, etc. But

then you have important fiscal policy that the White House is in charge of.
Thus, there is where the politicking starts, with the aid of Congress.
Some past and present facts:

One: You have the Keynesian free-spending we are so familiar with in the U.S. and Europe, that creates gigantic budget deficits, in the hope of stimulating economies out of recessions. Experience shows they help foster deep depressions. Yet, they sound impressive. Put more paper into the pockets of consumers sounds inviting but repetitive experience shows it’s downright self-defeating and becomes a treadmill to meltdown. Budget deficits cannot be sustained for long.

Two: Politicians may concede the danger of budget deficits by agreeing to balance their finances with higher taxes to meet enormous outlays. But they never reduce those expenses sufficiently to get at the root-cause of economic problems. Government spending, by its very nature, along with huge taxation, are taking needed capital and working cash that business must have for operating and expanding business. Higher tax rates tend to reduce tax revenues.

Three: The best alternative looks at tax rate reduction, in order to expand business, where total tax revenues eventually increase to help balance budgets. This has happened whenever tried. But the method is not attractive to politicians who are selling class-warfare. They refuse tax decreases to the “wealthy” business class, whose taxes, in fact, they politically target for increase.

Fact: Higher tax rates have been shown to decrease tax revenues. But this does not sit  well with political cant.(See the Earl J. Weinreb NewsHole® comments.)