Posted By RichC on July 31, 2011
For many of us, getting a visual picture regarding the debate polarizing the country around the nation’s debt and deficit is helpful in understanding just how big the problem is. I found a WSJ graphic to be a clarifying example as to the gap between what we spend and what we take in as a percentage of GDP (the market value of what we produce). Economist, politicians and those who manage a business or family budget agree that our path is in no way sustainable … unfortunately not all agree on what we need to do in order to correct the problem.
For the simple minded (no offense intended), we need to reduce our spending (tighten our belt) and work harder and smarter just as most families do when facing budget shortfalls. The first part is easy for all but an elected politician who is charged with cutting … the second part is a bit more difficult for those without a job or the skills needed to fill the positions that are available.
For the economist (depending on their school of thought), it is a bit more complicated. Most of them recognize the need to control spending, but they also for the most part agree that during a recession nations soften hard times with selective government spending and easing money supply in hopes to spur job creation. For the most part this has been the ‘tried’ strategy of the Obama administration for the past couple of years. The Federal Reserve has eased the money supply with lower interest rates (near zero percent) and the administration has implemented large stimulus packages in the hopes of creating jobs. Disappointingly, the policies have failed and in the opinion of many, it was due to how the stimulus was managed (costing nearly $400,000 per job created) … along with the administration’s additional regulation of banks, employers, entrepreneurs and investors – or the “unknowns” within these regulations.
It is my opinion that if we can somewhat agree with the brief explanation above in recognizing the problem, then we are halfway to a solution.
- Recognize that our nation spends too much of its GDP and that it is not sustainable … therefore reduce the size of the government and the cost to operate it by electing representatives who pledge to balance spending with revenue and will cut from every area of the budget (what’s wrong with a balanced budget amendment … even if we need a few tweaks for recessions, depressions and war?)
- Recognized that our nation needs to be business friendly and at we should at least be on an equal tax and regulation footing with the other countries we compete with – encourage companies to expand here by modifying the tax code to attract international corporations.
- Recognize that entrepreneurs and small business create the most jobs and offers the American dream to those willing to work hard and take risk. Remove the regulatory issues, tax complications and litigation fears that has made starting and running a small business increasingly difficult. (as someone who built a business and complained about government and tax paperwork in 1980s, I can tell you that it would be far more difficult and cost prohibitive today)
- Recognize that we live in a country that was founded on principles of freedom and liberty. Our government is far too over-reaching and now dictates decisions that should be made by the individual. Remove the newly enacted laws (e.g. Obamacare) and policies which takes away citizen’s independence and does not nurture personal responsibility.
As I began writing this, I realized that I once again headed down the “platitude not policy” being argued by George Reese with me on Twitter yesterday. I guess I can’t help myself. Perhaps we all see clearly through the eyes of our political philosophy?