Basic facts about our economy

Published: May 5, 2013
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The 40th president inherited an economy worse than the economy inherited by President Barack Obama. Fortunately, No. 40 majored in economics and knew what to do to turn the economy around. Ronald Reagan didn't need graphs, charts or formulas. He understood the most basic and most important fact regarding any nation's economy: Every dollar that passes from a private citizen to a government agency weakens the economy. It doesn't matter if the dollar goes for income taxes, sales taxes, excise taxes, tariffs, traffic tickets, permits, licenses, fines or whatever. It doesn't matter if the government agency is local, county, state or federal.

That dollar is one less dollar each citizen will spend with our nation's companies. Then, the companies will make fewer sales, will need fewer employees and will pay less income tax. The revenue to the companies and the government will decrease. The citizens and the government will have less money to pay their debts; private and government debt will increase. Sound familiar?

Does this mean that no money should pass from a citizen to his government? Of course not. Governments need money for defense and for the minimum constitutional functions of operating a government. Reagan finally got taxes reduced and the country entered the longest period of peacetime prosperity it's ever known. The quickest way to wreck this prosperity is to increase government spending while simultaneously extracting more money from the private sector to fund the increased government spending. Sound familiar?

Mike Jones, Oklahoma City