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Letter to the Editor: More money in circulation creates more wealth


Editor:

I enjoyed the letter by Mr. L. John Bost of Strasburg. Unfortunately, he is looking through the wrong end of the telescope. Governments need revenues (taxes and fees) in order to provide the services we have come to expect. If they do not have enough revenue, they must cut services and lay off workers, raise taxes and fees, or borrow money, or some combination thereof. If they raise taxes and fees, cut services and lay off workers, this results in less money coming in the next cycle and the downward spiral will continue. That's what is happening in Greece. (France got so fed up with the austerity program, last I heard, they elected a Socialist government instead. I have no idea how that will work out.)

We need an upward spiral instead. Ours is a consumer-driven economy. We need to get money back into the community. The more money circulates, the more wealth it creates. Government services, contracts to repair our infrastructure, improved education all put money back into the community, increasing economic activity and encouraging businesses to expand operations, thus bringing in more sales and then encouraging new hires, resulting in new tax revenues. (Obviously a tax cut alone cannot save a business enough money to meet payroll for even just one more employee.)

Gloria Rickel, Front Royal


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