Political

Moving Politics Forward

If you had to prioritize the issues facing the United States of America for the next decade it would roughly look like this:

1)      Economy / Jobs

2)      Budget Deficits / Total Debt

3)      Maintaining Superpower Status / #1

There is a major philosophical difference between how the Democratic Party and the Republican Party would go about tackling these issues.  One party believes in spending our way out of trouble and the other believes in cutting spending to get us out of trouble.  Critics may argue that even those philosophies don’t even apply to the parties anymore as both parties have been guilty with excessive spending and excessive cutting for the past few decades.

Not all is doom and gloom, but Washington has to take action and has to take it soon.  At some point in the near future we are going to get to a point of no return after which we can kiss our supremacy goodbye to Brazil, India, China and Germany.

Here’s the foundation of how our politicians should tackle the issues:

1) Budget Review – Spending Cuts:

1. Let’s take a step back and look at the budget from a 30,000 ft level.  There is a ton of money that can be cut from the budget without destroying the country.  Money can be saved in social security.  Remember, not cut, but saved (big difference).
2. Money can be saved in the Medicaid and Medicare programs.  Again, saved, not cut.
3. The Pentagon released a $100 billion savings plan for the future, but realistically that number can easily be doubled if not tripled.  Just getting out of Iraq and Afghanistan would save the U.S. an enormous amount of money.  Remember, we should get our troops out; not the CIA and the drones that come along with them.
4. Of course for the time-being we need to cut discretionary spending as well.

Talk about a compromise; Republicans will like savings in entitlements and discretionary spending, but not in defense spending.  Democrats will like defense cuts but not entitlement savings, but that’s how you compromise; everyone will need to share in the pain.

2) Budget Review II – Tax Increases:

Federal Debt

Spending cuts will only get our budget deficits in order.  It won’t do us any good in creating jobs (at a massive scale) and won’t do anything to cut our total debt obligation.  Whether you’re a Democrat or Republican, experts such as David Walker agree that in order to get rid-off our debt and create millions of good paying jobs (not low income, but middle income) you’d need a massive targeted stimulus and for that you’ll need new revenues.

1. Targeted Infrastructure spending at a large scale will not only create jobs, but stimulate the economy in the short and in the long run.  I’m not talking about funding unemployment or bailing out banks here, I’m talking about building new highways, new airports, etc.
2. Paying down the debt (principal) will make the dollar stronger, keep the interest rate low and make us less dependent on foreign banks and governments (China, Japan, etc.).  We pay over $600 billion per year in interest payments, but make no dent in our principal amount owed.  In fact, we continue to add to our debt on a massive scale.

A targeted tax increase coupled with a simplified tax code will ensure that we don’t hurt the middle class and small businesses, but ensures that the taxes levied are done fairly.  Too many tax loopholes currently exist and too many people and businesses are getting tax credits they don’t deserve.  Again, I’m not talking about increasing the income tax to over 50% for the rich, but by simplifying the tax code and closing loopholes you will accomplish hundreds of billions of dollars in added revenue.

If spending cuts and new taxes are enacted we’d ensure that our financial books are in order and we’d ensure that the U.S. economy will grow over 4% per year in GDP for many years to come.    I urge Washington to stare reality in the face and stop the rhetoric and concentrate on improving this country for future generations.  If we don’t, historians a few decades from now; will write about the great American economy that only lasted for a little over a century…

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