Balancing the Federal Budget, One Thing That is Missed.

What do Mike Lee and Amway have in common?

The more I see of Mike Lee in the Senate, the more and more dissatisfied I become with his performance.  It seems that all he has done since he went to Washington is agitate, and has not proposed or said one thing positive.  I know we he did not go along in Washington, just to get along, but we need more than just a muck-raker, we need someone who will actually help the economy.  This is not only my main criticism of Lee, but of the Tea Party in general.

First of all, there is the Laffer Curve.  This is what is cited when people say that you can grow the economy simply by cutting taxes.  I do not disagree with the principle, I only point out that this is a curve.  Think of it as something similar to adding lanes to a highway to improve traffic flow.  You have a highway that is one lane in each direction, and you add a second lane, you have increased the capacity of that highway by 100%.  When you add the third lane, you increase the capacity of that highway by 50%.  When you add a fourth lane you increase the capacity of the highway by 33%.  And when you add a 5th lane, you increase the capacity of the highway by 25%.  Soon, you get to the point where you are only paving new lanes and not doing much to help at all.

Back to tax cuts, in the early 1980's, the Reagan Tax cuts helped the economy greatly.  The Bush tax cuts of the early 2000's helped, but they were arguably less effective.  The next round of tax cuts would likely be less effective.  Each dollar that is not taken out of the economy has less utility, just like each lane of added to the highway.

The same argument can be made with Keynesian Economics and borrowing money to help improve the economy.  The first dollar borrowed will be the most effective.  But soon, all you have is debt and you are doing very little to help the big picture.

It is time for the government to think out of the box, and help other people who have the capital to help the economy do more than they have at this time.  And this brings me to Amway.  I have read from Dave Ramsey that 90% of Amway distributors quit before they make a significant amount of money.  Dave says that in order to succeed at multi-level marketing, one has to work very hard.  Amway's secret is to pump people op psychologically, to help them feel good about what they are doing.  Make people feel good about their chances for success, and eventually, some people can make money at it.

Mike Lee and the Tea Party are similar.  They have made a lot of noise about getting the Federal Government to balance the budget in two years.  This makes people feel good about voting for them.  In reality, the Tea Party Caucus in Congress has done little to improve the economy and get people back to work.  Eventually, the Democrats are going to turn this against them.  Probably sooner rather than later.

Eventually, the Tea Party needs to come up with a plan to improve employment and help small business succeed other than giving the same old line, "get government out of the way."  Most small businesses close within 5 years with or without government in or out of the way.  Just like with Amway, feel good politics will only get us so far.

Coming soon, by Memorial Day, this blog will unveil a plan that will both cut the size of government and build small business.  Stay tuned...