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Tonights Obama vs Romney matchup will not fix this economy, but I know what could

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It's official. As of July 2012, both presidential candidates have combined to raise over one billion dollars for their campaigns and are on pace to reach close to 4 billion dollars. Keep in mind, this does include estimated super PACs funding. Never before have we seen this amount of money raised so quickly for a presidential campaign. Considering the slow growth of our economy and an adjusted unemployment rate above 8%, many people wouldn’t expect to see money raised at this rate. But, should we really be surprised? Many Americans love presidential politics as much as they love professional football, baseball, and basketball teams. It’s a national competition with only two relevant contestants to choose from. In one corner you have the democrats and the republicans in the other. There are promotional events to build up interest like the democratic and republican national conventions. You have a few prefight trash talking sessions, better known as debates. Now that I’m thinking about it, this may be better described as a championship boxing match. Staging the conclusion of this contest during the year of the Olympic Games doesn’t hurt its cause either. It just adds to an already heightened competitive environment. But, is it truly all about competition? Most people will tell you presidential elections are about improving the country and exercising the right to vote. While I do agree with this premise, I feel the competitive nature of this race may be more important for campaign donors than the idea of improving this country. Here are a few points that have led me to this conclusion.

Presidential policies have little impact on economic booms.

Presidents have never been able to improve the national economy without a lot of help. President Coolidge is remembered for overseeing one of the best economic periods in American history, but his smaller government policies were not the primary reason for this success. He had a lot of help from technological advances, post war international commerce, and great consumer confidence. New inventions and advancements within consumer products were being produced at a rapid pace. The public loved the idea of life being less manual and purchased newly affordable automated products like refrigerators, cars, radios, electrically powered homes and other similar luxuries. People like Henry Ford, were working on ways to make their products more affordable for more than a decade and the 1920’s brought fruition to those ambitions. Factories were booming because of the post war entrances into European markets and helped to increase consumer confidence. President Coolidge also benefited from a republican led congress, which eased the ability to pass bills that would further his vision for the economy. Some people argue the policies passed during the Coolidge presidency is what led to the Great Depression, but that has little to do with my argument. President Clinton benefited from the dot.com boom and the typical post war (Gulf War) boost. President Kennedy and Johnson both benefited from the Vietnam War. Regan benefited from the 1978 U.S. Supreme Court decision, Marquette vs. First Omaha Service Corp, which led to a major credit card boom during his term. He also benefited from a Republican led congress to help usher in his economic policies. Presidents residing during economic booms have always been a small part of the force behind economic booms. So, why do we invest so much in making sure they get elected if their impact is so minimal?

Our government is limited to the perspective of two political parties; Republicans

and Democrats.

Each year we hear the same political philosophies argued within our government, socialism versus conservatism. Neither is completely good or bad, but we pretend one is so much better than the other. Why; because we enjoy a good debate. We want to see a winner and a loser. This two party system doesn’t create a political environment that breeds new ideas, it discourages them. Once the political candidate’s ventures too far away from democratic or republican strong points, their chances of being elected are greatly diminished. They lose significant monetary and vocal support needed to influence voters when this path is chosen. Instead of being revered for their leadership, they are described as radical, delirious, rouge and idiotic. These circumstances make it pretty difficult to really create governmental change. So, what are donors supporting by backing these two political parties? The answer is fairly simple; tradition, exclusivity, and competition. They want to preserve their ways of thinking and beat the opposition. The balance of powers will simply continue to pass from one side to the other, which will limit any long term changes either side attempts to create. The two sides have essentially dominated our government and limited opportunities for change. Improving the country has little to do with this process.

Directly investing in local communities strengthens our country more than throwing billions of dollars behind a presidential candidate.

Most donors claim to support presidential candidates to improve the economy and lower unemployment. They say their candidate of choice gives us the best chance of strengthening our country, but that’s not true. The people that can help our economy the most don’t hold political positions. They aren’t the people on television running for president or other prominent government positions. They don’t hold large rallies and fundraisers to further a cause. These individuals are the very people throwing money behind presidential candidates; better known as political donors. If political donors were to use most of their donations to stimulate local communities, the economy would experience a much needed boom. Imagine the effect 4 billion dollars could have on small business (500 or less employees) growth if it were used properly. According to some estimates, there are roughly 30 million small businesses in this country. Three billion dollars distributed evenly amongst these small

businesses would result in each business receiving 133 dollars in sales, which would have little to no effect on the economy. But, that would be in a perfect world where all these businesses provide good services and products. What would this figure be if only profitable small businesses that provide the best products and services received these funds? What if donors required these businesses to hire at least 1 unemployed citizen in exchange for these

guaranteed sales? For the sake of this argument, we will assume only 1 out of 108 small businesses met this criteria. If these donors supported these select small businesses on an annual basis; the result would be roughly 279,000 small businesses receiving an annual 14 thousand dollar increase in sales. This increase would force these businesses to hire at least one full-time employee and create more business partnerships. Business owners that could not afford to hire someone with these additional funds wouldn’t agree to these terms, so there is no need to assume they wouldn't hire an unemployed citizen. We are dealing with businesses that may have only needed 3 - 5 thousand dollars in additional sales revenue to be able to hire a new full-time employee. Another positive result of this act would be an increase in consumer spending, which creates more jobs. All these new workers would have to spend their money somewhere. Two hundred and seventy-nine thousand new workers earning at least 25 thousand dollars annually would generate 6.9 billion dollars in taxable income. The private and public sectors would benenfit greatly from this increase in consumer spending. The trickle-down effect of this practice would easily drop the unemployment rate by a minimum 1 percent on an annual basis. Combine this drop with the natural fluctuations of our economy and we have an unemployment rate under 8 percent for the first time in 4 years. Talk about a stimulus plan. But this will never happen. We love competition and old traditions too much. Let’s allow this charade to continue flourishing and put our money into the hands of politicians. It’s the political season. The time of the year we’ve been waiting for. I’ll take my guy, you take yours, and may the best candidate win.

Don't forget to check out my blog at http://moneyetiquette.com/blog.html and also pick up a copy of "Did Everything But Think: D.E.B.T. on Amazon.com!

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