As voters, we have control of our own destiny, but unfortunately, we leave it in the hands of irrational politicians like Nevada lawmaker, Jim Wheeler, who recently said “I’d vote for slavery if that’s what his constituents wanted. “If we have that much power, let’s use it wisely.
I happen to think that our immediate crisis is our high unemployment and weak income growth. I’m fully aware of our huge debt but I remember at the end of WWII our debt equaled 120 percent of GDP. After the war we grew at an average of 4 percent but over the past 12 years we have only grown at an average of 1.6 percent. We need politicians who tout growth policies because if growth could be raised by one-tenth of a percentage point, the tax increases we have in place would equal more than a $1 trillion, which is the size of last year’s deficit.
At this point, more tax cuts along with the sequester cuts will delay growth.
As long as foreign banks are willing to loan us money at extraordinary low interest rate the short-term deficit it creates will not be a problem.
As taxpayers who vote, we need to come to grips with reality. We all would like to believe that our deficit is caused by waste, fraud; welfare, foreign aid, too much spending and tax giveaways to the rich but those aren’t the real culprits. Extraordinarily high medical calls, defense spending, and a Social Security system that has not been adjusted for people living longer are the main drivers of our high deficit and we want to fund those programs with the lowest tax rates since the Truman administration.
We shouldn’t fall for across- the -board spending cuts or tax increases because all things are not equal. We need to cut funding for programs that do not spur growth and increase funding for the few that promote growth. We need to do the same for taxes. We don’t have to rely on politicians or lobbyist to tell us which expenditures will promote growth and which won’t because we can look back in history and decide that.
The private sector lifted our economic growth in the past decades but the government played a crucial role. Where would we be without the Erie Canal, the space program, the interstate highways, public schooling, and the Internet, which was built by the Defense Department?
We have fixes for most of problem but the partisan solutions get in the way. We could make Social Security solvent without reducing benefits. According to CBO, eliminating the ceiling on earnings subject to the payroll tax or gradually increasing the payroll tax on all workers from 6.2% to 8% over the next twenty years.
I’m confident that economy will grow in 2014 and really start prospering in 2015 despite the antics in Washington, unless we default on our obligations.
“ Modest tax increases don’t prevent economic growth; they flow from economic growth.”
19th century German economist.