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Over the last year, one phrase has continually popped up to justify a lack of investment to help create jobs and grow the US economy – “economic certainty.” This phrase was used to justify and praise the extension of the Bush/Obama tax cuts in December. It was used for the Debt Ceiling increase. It is being used to justify the Super Committee efforts and the push for another tax holiday for corporations on their overseas profits.
Another buzz phrase we keep hearing suggests we need to keep cutting taxes for those with the top 1% to 5% of income, as they are the “risk takers.”A companion talking point is how 50 percent of the people don’t pay [income] taxes at all, which ignores payroll taxes, excise taxes, local taxes, property taxes, etc.
Mr. and Ms. Investor? May I take this time to point out to you and your acolytes that if you are expecting “economic certainty” before you are willing to invest, you probably shouldn’t be called a “risk taker.” In fact, if you have a need for certainty in your investments, then you are about as far from being a risk taker as it is possible to be.
Should investors take the time to determine the level of risk with which they are comfortable? Of course. They should check business plans. They should try to mitigate the risks involved with their investments and have a plan that allows them to address the risks. But if you are an investor looking for certainty before investing, then you probably should keep your money in risk-free investments, if not under a mattress.
You should also quit whining about the prospects for increasing your taxes. Raising them in the near term would not hurt the economy as much as cutting spending on the social safety net. So if raising your taxes is a concern, then you should be more concerned about what some in Washington are planing for cutting Social Security, Medicare and Medicaid benefits.
And the video is because I can.