Some of my loyal readers (cough…Avi) have mentioned that Crastinate has been very social media/Web 2.0 focused lately. What can I say? There is SO much to talk about! But this post is about the economy. I found a great video explaining in simple terms why our financial system has been collapsing (it’s a little long but extremely good).

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

I had a meal with a friend this afternoon who is not a fan of the stimulus bill Obama is pushing through. His argument, which I think has validity, is that tax cuts have been proven to revive economies out of recession and that excessive spending on anything other than tax cuts will just create a huge deficit for future generations. The other argument that I’ve heard is that both tax cuts and government spending has helped revive economies in the past. So both the conservative and liberal apporaches have some basis in history.

Let’s be clear. The current highest tax bracket is 35% (all tax info is from wikipedia). During WWII, the highest tax rate ranged between 79% and 94%. The lowest bracket started at 4% in 1939 and was at 23% by 1945. The point I’m trying to make is that the tax rate a) has risen during times of economic need and b) has been all over the place so who can say what the right rate is? Republicans always think we should lower taxes. Lower to what? What is the right rate and why? Democrats think the government needs to be bigger. How big? Should they take over state public school systems? Where do we draw the line?

My point is that there IS a balance and none of us know where it is. At least I’m willing to admit it. Next time someone tells you we should cut taxes, ask them how much and why? See what kind of “educated” reponse you get.