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| The Truth About... |
Free
Market.... America's
economy is based on the "free market". The free market is when
people and businesses negotiate with each other to buy and sell goods
and services without any government interference.
Let's say you have a computer you want to sell. You would possibly put an ad with your asking price in a newspaper or online to sell it, or you might even try to sell it at a yard sale. People looking for a computer would look at it and then decide if the computer fits their needs and if they are willing to pay the price for it to fill those needs. If the computer fits their needs and they are willing to pay your price, then the sale will occur. If someone down the street or at a store has a computer that fits their needs and is priced lower, they will probably buy that computer instead. This is the nature of the free market: the seller has a product to sell and a need for money, the buyer has a need to to fill and the money to buy it. The transaction between seller and buyer fills both their needs and the price of the product finds it's natural level. When the government interferes with this transaction by adding taxes, fixing prices, imposing rules and regulations on the seller and buyer, or becoming the seller, the "free" market can't operate efficiently. For instance, when the government taxes an item, the price of the item is artificially increased. People naturally will look for a better bargain on that item, or will decide not to buy it if the taxes are really high. The seller still has a need for money but either less or no buyers for his product. As a result, the seller will have to lay off people who work for him, or possibly close down his business. With less sales because of the increased prices, the government collects less tax money than it thought it would. Since seller and the laid off people have less money to spend on their own needs, people they would buy from also suffer from less sales. With everyone making less money, the government also collects less money from the income and sales taxes all these people usually pay. As you can see, when the government interferes with the free market, everyone suffers. The people have less money to spend on their needs and the government collects less money in the long run. Federal, state, and local governments all interfere with the free market to some degree. Minimum wage laws, gasoline taxes, property taxes, environmental regulations, sales taxes, affirmative action contracts, regulations on the health and medical industry, and forcing employers to provide benefits to employees are all ways that the government interferes with the free market. As a result, gasoline prices, health care costs, government spending, and the job market are out of control. Everyone loses, there are no winners. Conservatives believe in reducing government interference to a minimum, which leads to a stronger economy, better living conditions for the citizens, and greater liberty and freedom for all. |
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