Reducing Taxes Will Impact the Economy....If?

Will lower taxes improve the economy? There is a current initiative to lower the tax rate with the belief that doing so will increase business and raise the economy. The proposal is a solid one but exists under set of fundamental beliefs that if such taxes are lowered there will be more to invest thereby spurring the economy. Any tax reduction proposal should consider the need to reinvest such money within the U.S. versus loosing it to investments in foreign markets.

Lower taxes means more profits for businesses and essentially more return on investment money. This is great news depending on what businesses and investors plan on doing with it. There are four broad possibilities on what happens to the money:

1.) Investors take the profits and invest in foreign markets: The money is essentially lost to the American economy, businesses, and workers.

2.) Investors take the profits and put the money into a bank account or other wealth holding account: Under this circumstance the money is held without working for the economy and is placed in reserve for some future spending date.

3.)  Investors spend the money on their lifestyle: Investors use the money to buy houses, cars, condos, clothes, merchandise and services. The money contributes to the economy only if the products and services are from the U.S. and support the growth of businesses.

4.) Investors and businesses opt to reinvest the money into their business. Assuming CEOs and investors believe that the economy will continue to grow, they will option to earn a return on their money by investing in their business and thus leading to an expansion of capabilities, jobs and the economy.

Respending the money on local goods and services is a nice deal but the reinvestment of that money into businesses produces a much larger benefit for the economy. Any plan to lower tax rate can include the encouragement of reinvestment in American based businesses versus allowing those savings to be reinvested somewhere else.

People are not necessarily opposed to tax reduction as 18.9% of the total economy is used like a drug to feed a spend happy government. Yet, providing tax breaks for businesses without a mechanism of ensuring that money stimulates the American economy would be foolhardy. Perhaps if we make the tax reduction contingent on reinvestment we will have a better result.

Interaction is the Key to Economic Cluster Success

Clusters are an interconnected network of businesses that share ideas, work on collaborative projects and compete against the market. They are clusters of innovation that require constant engagement to achieve their mutual goals. According to a study in the International Review of Management and Marketing, a cluster is effectively formed when there is coordination of interaction with the environment, coordination of financial-economic policy, coordination of production-economic activity of members (Basyuk, et. al. 2016).

Coordination with the Environment: Companies within a cluster don't act on their own and are part of a larger network of co-creators. While they may engage in some competitive activities they ultimately work together to create synergy that benefits all members that are actively engaged. Helping them to actively engage in cluster management is helpful. 

Coordination of Financial-Economic Policies: The cluster survives because city, state, and national policies are designed to help it survive by creating a pro-business environment. When policies are reviewed and form an advantageous environment, businesses are more likely to flourish and grow in a way that contributes to national development. 

Coordination of Production-Economic Activity:  It is not enough to invent products but also to create them in physical form and to do so in a cost effective manner. Connecting inventors with builders is important for realizing something in tangible form so that it can be sold on the global market. The clusters advantages reside in the creation-production process. 


Economic clusters need to work together or otherwise they would be disjointed businesses in the same locality that don't have much tangible benefit. When ideas are shared, government policies in pro-business form, and inventors are connected with manufacturers businesses have the ability to achieve more than they can on their own. Successful customer management encourage interaction of all the cluster elements to create a collaborative environment.

Basyuk, A. et. al. (2016). Administration management in the innovation cluster. International Review of Management and Marketing, 6 (6s).

Higher Education is too Important to Not Protect

Nations succeed on the abilities of their workers and providing a lifestyle that maintains a growing development of skills and important. Higher education is something we can't afford to give up and not encourage. Yet how we do this can take many forms as we ponder how we are going to make it affordable and beneficial for the nation. We may want to go back to the drawing board and start with fresh ideas and methods that are focused on higher education's essential purpose.

Much of the problem we face is the entrenchment of what higher education. We think it is expensive structures, traditional mindset and the protection of privilege that makes higher education valuable. The problem is that these things are costly to maintain and take a lot of money out of the hands of our national coffers. But perhaps there is a different way?

When we think of higher education we should think about its essential purposes of raising our skill levels, expanding our mental capacity and transferring knowledge from one generation to the next. The forms and methods we use to maintain our higher education status is open for debate. Few politicians seem to have any solid answers.

While we discuss higher education in terms of loans and Pell Grants we should keep in mind that higher education is a process that has an end result in expanding our economy and making us a competitive nation. It isn't that we shouldn't be protecting and supporting higher education but that we should seek better and more cost effective methods of educating.

Online education has grown in recent decades and is used by both traditional and non-traditional schools. We also have certificates, continuing education and trades schools. Each focuses on a specific need within the market to fulfill the knowledge gap. We need them all in one form or another.

If we as a nation want higher education to continue forward we will need to rethink its expensive form and try and develop better methods that allow greater access. That doesn't mean we shouldn't be supporting research and the gaining of new knowledge, but it does mean that we should focus on the essential purposes of advanced education in our rethinking process. Many of the structures, regulations, and restrictions are designed more to protect the "status quo" then it is to educate people. Wouldn't it be great if our educational process focused on educating people than protecting artificial structures?

Pulling Your Team Together

Pulling together team takes a little skill as people from varying walks of life and skill sets come together to achieve an objective. Whether this is for business or this for something else like a non-profit the process is the same. Successful teams are built and created from a particular mindset. The following tips will help you create a high functioning team.

1. Different Strengths: Pull together a team with the strengths you need to accomplish your goals. Recruit people with the skills you need and try and ensure that they support the goals of the team.

2. Find Commonality: Find something all the members believe in. It could be the development of innovative products or it could be getting the books in the hands of kids. The values can be used to create a way of focusing on the end result.

3. Set Your Goals: Develop specific goals for the team to achieve. They will be your highest priority. All actions will be measure against goal attainment. When you achieve one goal work toward another.

4. Create Motivation: Find ways of motivating your team through recognition, rewards, compensation, and experience.

Working from your Strengths

Working from your strengths can lead to greater productivity and overall development of one's skills by focusing on what you do well. Putting your best foot forward can reap rewards for your career as you align your strengths to the needs of your employer in a way that leads to mutual benefit. We can't be good at everything so be really good at what you know your good at!

When we are young we are taught to be good at everything. At a young age we need to learn how to develop our skills and explore our abilities. Yet, as we get older we will need to take those skills we are good at and apply them to earn a living.

Each person is born with certain skills and abilities that once discovered need to be practiced to achieve mastery. We start out slowly and clumsy until we slowly gain confidence with each new experience. Over time we know what our strengths and weaknesses are and can use them for our benefit.

Tips for working from your strengths:

1.) When engaging in work projects and activities seek to use your skills you are good at to have the best outcomes.
2.) Develop working relationships and hedge your weaknesses with those who hold strengths in those areas.
3.) Continue to develop your weaknesses but focus on your strengths.
4.) Volunteer and seek out jobs that maximize your strengths and lead to the highest levels of success.