Today is going to be a rant. My apologies.
I’m not a hater, but what I deeply dislike is when politicians offer solutions that have little to do with the problems at hand. You see, I’m a problem solver. You should study a problem, and develop a solution that fixes the problem. Then implement the solution. It’s really not as tough as it sounds. And when you explain it like this, it doesn’t even sound very tough.
Example 1: In 2000, candidate George W. Bush ran on a platform of tax cuts. Why? Because at the time the federal government was running a surplus (though the surplus was created by social security payments, a topic we’ll get around to soon). Bush wanted to give this money back to the people who had earned it. Then to pull us out of recession, President Bush pushed through these very seem tax cuts and tax reforms in an effort to stimulate the economy.
Did the Bush administration study the recession and develop a solution for the problem? No. For the right, tax cuts are always the solution.
Example 2: Most liberals in this country want a single-payer, government run health care system. Is the cost of health care going up? Are people struggling to afford it? Are there problems with the current system? Then we need universal health care.
Did the Democrats in Congress and the Obama administration study the problems with our health care system and develop a strategy to fix the problems? No. For the left, universal health care is always the solution. And since they couldn’t get universal health care, we got ObamaCare. A system designed to push us towards universal health care in the future.
So here we are today. Unemployment remains above 9%. Economic growth is stagnant at best. The economy appears headed towards a double dip recession. But the President has a plan. Stimulus four! Or is this stimulus five? Six? I’ve lost count.
For the President, he has two solutions looking for problems. How convenient.
One, the President wants to spend more money on creating jobs. He refuses to call it economic stimulus because that wouldn’t be politically popular. This time he wants to spend approximately $450 billion. How will he spend it? Sending money to the states to help pay for teachers. More infrastructure investment — though this time he wouldn’t call them shovel ready jobs. Extend unemployment benefits and the temporary payroll tax reductions. And some targeted tax cuts and tax credits for small businesses that will do little to create jobs.
How will he pay for it? That’s easy. Another solution looking for a problem. Tax increases. The administration has proposed that we’ll raise the $450 billion in tax revenues by cutting oil subsidies, and closing loopholes so that the rich “pay their fair share”.
Spend now and raise taxes later to pay for it. Solutions looking for problems.
The President has repeatedly said that his bill should be passed “now” because these are ideas that Democrats and Republicans have agreed upon in the past. And if the bill is not passed, it’s because the GOP is putting party before the economy.
He’s partially right. These are ideas that politicians have agreed upon and tried before. That doesn’t make them the right thing to do. Matter of fact, we have already tried most of these recommendations before. It was supposed to prevent us from exceeding 8% unemployment. It didn’t work then, and it won’t work now. We had the first stimulus of more than $800 billion. We’ve printed money with QE1 and QE2 to the tune of about $2.3 trillion. The President and Congress have already passed cuts in payroll taxes and extensions to unemployment. Through tax cuts, stimulus spending and monetary policy, we have injected trillions into the economy. It hasn’t worked. Keynesian economics has failed.
Why? Because it doesn’t fix the problems at hand.
We have long-term systemic problems that the President has failed to offer solutions to fix. And many of his own policies have actually exasperated these problems.
We badly need tax reform in this country. The President has discussed cutting loopholes on corporate taxes and lowering the corporate tax rate which is among the highest in the world, but has never actually submitted a plan that does this. His own deficit commission recommended this same approach for corporate AND personal incomes taxes — closing loopholes and lowering tax rates. The President won’t do it. Why? Because you can’t play the class warfare card if you fix the tax system.
We badly need entitlement reform in this country. The President has discussed that Medicare is a long-term financial problem that needs to be fixed. It’s unsustainable in its current form. He’s right. But where is his plan? I can’t find it. And he won’t even discuss fixing social security which is every bit as unsustainable as Medicare.
We badly need regulation reform in this country. The President has said that he agrees, even writing an op-ed in the Wall Street Journal discussing his plan to cut needless regulations. He named Cass Sunstein as his regulation czar, spent months evaluating government departments, and has come up with $10 billion in savings over the next five years. It has been estimated that government rules and regulations cost the economy approximately $1.75 trillion per year. Not to mention the mountains of new regulations being written by the EPA, and implemented by ObamaCare and the Dodd-Frank banking reform legislation.
We badly need a balanced budget in this country. It’s not all Obama’s fault, but in the last few years our national debt has jumped by trillions of dollars, and our debt-to-GDP ratio has jumped to almost 100%. This is a bad number. Really bad. When you see the economies failing in Europe, that’s because their debt-to-GDP ratios have exceeded 100%. Spending is on an unsustainable path. The credit ratings agencies have warned that we must stabilize our debt-to-GDP, and that a $4 trillion deficit reduction plan is only a “good down payment”. Where is the administration’s plan to stabilize debt-to-GDP? I can’t find it.
Well, I’ll take that one back. The President’s debt commission put together a plan to stabilize debt-to-GDP. The administration just ignored it.
It has been estimated that big business has somewhere between $2-3 trillion sitting on the sidelines, much of it kept overseas. How do we get this money back in play in our own economy? By fixing our long-term systemic problems. Only then will this money be invested into our economy. And only then, will we once again be headed in the right direction.