Is it a good idea to promote consumerism to get us back to full employment?

Americans overspent for at least 30 years; the financial collapse exacerbated that tendency to overspend. Then the paradox of thrift kicked in as Americans began to pay down credit card debt; the result---consumerism took a hit at the same time the housing market collapsed.

If we assume we need to kick start the economy here is a way to get "the most bang for the buck". Suppose we allow every middle class American earning less than $100,000/year to deduct from their W-2 form every item they buy costing over $300 up to a maximum of $20,000. In addition they can claim charitable donations and medical expenses, but not home interest so that renters are not discriminated against in the tax code.

What this really means is that anyone earning less that $120,000/year would qualify. Such items as laptops, PC's, cars, refrigerators, stoves, etc. would all be deductible.

The lost revenue would be made up by the taxation of companies selling these items. This is the "cheapest" way to goose the economy.

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kingjs avatar Jobs & Employment
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