Demand, not supply

“What about a $17 trillion national debt don’t you understand? Our great-grandchildren will never be able to pay that off! We must cut spending,” said the Tea Party man. In 1945, our federal debt was $240 billion, 20 percent more than our gross domestic product. We never paid off that debt. We grew our economy instead, reducing the debt-to-GDP ratio to about 30 percent before Ronald Reagan took office. Reagan cut taxes to jump-start our economy. Today, our debt-to-GDP ratio is about 100 percent.

Supply-side economics asserts that cutting taxes and spending will cause businesses to hire more people and produce more goods and services. This is only true if people who want those goods and services have the money to buy them. Demand for goods and services drives our economy, not supply. When most of us don’t have the money to create demand, our economy slows. The rich invest their money abroad, creating jobs in low-wage countries. Prices in this country are kept low, along with wages, and our children cannot afford a middle-class life.

Our economy grew over 12 times from 1945 to 1980, but only six times from 1980 to present. To restore our economy, I believe we must return to demand-side economics: 1. a tax structure that encourages investment here at home rather than abroad, 2. government investment in new infrastructure, 3. college educations for all our children and 4. livable wages. I believe the graduated income tax of the 1940s and ’50s is the solution. RUUD DuVALL

Fayetteville