Spend More, Tax Less, Forget the Deficit...A Winning Combination

[David Atlee]

from my blog at http://theatleeappeal.com

Well, my original intention for my next article was going to be geared towards America’s educational problems. We’ve seen articles here and there that briefly detail some of the current problems our schools face even though educational spending continues to grow exponentially. To be honest, I was a little overwhelmed at the amount of information regarding this subject. In order for me to write a smooth, clear article with ample facts and research, I would probably have to dedicate an entire week in order to prove points and give opinions. I don’t have that time luxury yet. Maybe in the near future, after I get a bit more precise and efficient in my fact finding and argument building, I’ll come back to this subject.

In the mean time, I ran across an interesting article from Yahoo! courtesy of the Drudge Report today. The title pretty much says it all: ”WH Economist calls for more spending, less taxes”. Hmm. So for any of you that have ever taken a pay cut at work, do you increase your weekly expenditures at the same time you lose weekly income? Of course you don’t. Or at least you shouldn’t. But who are we kidding, this is Washington. In their mind, there is no such thing as gravity, and we can all breathe underwater as long as we hold our nose.

Christina Romer is the lady with the quotes of day. If the name is ringing a bell, it is because she was Obama’s chief economic advisor. She was basically forced to step down due to poor performance as an advisor. All you had to do was open up the front page of every news paper in America to understand why. This is a typical politician at work. You fail at your job, then you try to advise others on what you think needs to be done to whatever it was you were in charge of. Oh, and to top it off, this woman is an economics professor. But she teaches at UC-Berkely, and we are well aware of what comes out of that place.

So, what did this lady say? The first line is in the title of the article. She wants Washington to increase spending while decreasing taxes. We have two things to work with here. One: We have another Keynesian who thinks that the only way to get this economy moving is to increase government spending. Well Christina, what on earth do you think Obama has been doing since he first got into office? He has been spending as if there was literally no tomorrow. To put things in perspective, his stimulus bill, yes – just one bill, cost more than all of the past 8 years of the Iraq War combined. That statistic is from the Congressional Budget Office.

Two: Decreasing taxes. I’ve yet to ever really hear of a liberal campaign for tax cuts. I thought tax cuts were a liberal’s kryptonite? Wasn’t it Bush’s tax cuts that helped create the recession according to liberals? I can probably make an honest bet that when Mrs. Romer is asked to clarify what she means by tax cuts, it will most undoubtedly be for the “poor and middle class only”. Those evil rich people aren’t paying their fair share in taxes.

Another fun thing from this article. Romer calls for investments in infrastructure. Wait, wasn’t that what the stimulus was for? The same stimulus that you helped create as Obama’s economic advisor? Shovel-ready projects were just waiting to be started in order to boost our infrastructure courtesy of the stimulus bill. That worked. So far we are seeing a pretty easy pattern to follow. In Romer’s mind, the only reason previous spending bills have failed is because they weren’t big enough. More spending!

Not only do we have all of the stuff mentioned above, Romer completely contradicts herself in the next paragraph. The AP paraphrases what Romer said: “that while some new policies should be viewed as emergency measures, most should be paid for with future spending cuts or revenue returns.” So, we need to cut spending, and raise it at the same time? Future revenue returns? You won’t have any returns if you increase spending and decrease taxes at the same time. Where the heck will you get the money from? Print it and watch the value of the dollar implode? Or borrow it all and watch the value of the dollar implode due to high default risk? And this woman is a college professor in economics? God help her students.

The last gaffe is this. Romer said that our record-shattering debt is no excuse “for leaving unemployed workers to suffer.” So what is our record-shattering debt then? Just some meaningless, arbitrary number that has no bearing on our current economic situation? Should we just keep throwing money at the unemployed? If I have extremely high credit card debt, should I just keep swiping it so I “don’t have to suffer”? The arguments liberals try to make to support their economic theories are childish due to lacking any common sense. If you really want to help people out, let them keep their own money. Let us, the producers, decide what is best for our money. Washington can’t spend anything that it first must either take or borrow. If Washington continues to borrow at this insane rate, our credit rating will plummet, making our cost of borrowing even more expensive. Not only that, foreign investors will pull their money away from our Treasury bonds due to high default risk. Once that happens, the Treasury will be forced to print more money which will set off massive inflation. If Washington allows the Bush tax cuts to expire, marginal tax rates on everything from investments and income will sky rocket. This will choke off economic growth at its source – private sector capital. Is the picture getting rosy yet?

If you truly want an economic recovery, the steps are as simple as pie: Reduce ALL tax rates, dramatically cut ALL government spending – that includes entitlement programs, and remove as much government red tape from business as possible. We want to create an environment that is the most business friendly on the planet. When you have businesses wanting to relocate to your country, you don’t have to worry about high unemployment. There might be a short term drop in economic activity if these policies were ever put in place. But remember, economics is something that needs a long-term, not short-term focus. With those economic policies set in place, you will have the recipe for long-term economic growth.

[Patricia M. McBride]

Ever notice that all the deficit spending our federal government does is always going to be paid for at some point in the future that never seems to arrive? Probably the reason we have such a huge deficit, you think?