Recovery Within 1 Year
Here’s my plan to get us out of this mess and into full recovery within 1 year.
First, freeze all spending this year. It’s nice to announce that you want to freeze spending starting next year on a small fraction of programs but not until you jack up the spending this year first. Freeze spending immediately and show that you are serious about cutting the deficit. All programs across the board. Allow for emergency spending bills that are only for the wars but don’t allow anything else to ride on those emergency spending bills. If a program is important enough to increase, it must be by decreasing or eliminating other programs. If Congress had to pick and choose what programs get what money, you’d see the most important ones stay and the unimportant ones go away. This freeze would stay in place until the deficit is gone and the national debt as well.
Second, cut all pork. No pork, nowhere. If it’s a continuation of an old pork project, cut the project. This sends the message that we’re in a new era of federal fiscal responsibility. It may mean that if Florida wants a high-speed train, they’ll just have to pay for it themselves, but then again, why am I paying for their train anyway?
Third, and this is the first key, promise and then follow through by vetoing any budget that doesn’t fulfill this. Of course, Obama is that superstar of the democratic party and they hold super majority in both houses of Congress. This really shouldn’t be necessary, right?
Fourth, it’s time for a new tax system. Repeal all tax laws and replace it with a simple and progressive national sales tax. Set the tax at 22% with a rebate for the tax on the first $20,000 for each American family. This is what makes it progressive. This would be revenue-neutral meaning that the amount of revenue should be about the same as with the current tax system.
Why? What would be the difference? It would put the American economy back on a foundation based on investment. When you get to keep your whole gross paycheck and are only taxed on what you spend, it encourages you to save and invest that money. What good is money in a savings account? It is used to lend to others so that they can increase their personal or business capital which then, in turn, increases their potential to expand and create more jobs. Another benefit is that it would make the United States the biggest tax haven country in the world. International companies would flock to locate their corporate headquarters here in the US creating millions of jobs instead of all of our jobs going to China and other third-world countries. The cost of operating here would be tiny compared to other countries and our trade deficit would reverse overnight.
But wouldn’t this take years for all of this to take place after the change? Yes. But we would feel the affects immediately. In anticipation, the stock markets would soar and the national savings rate would skyrocket which would unlock the lending freeze that the banks are still struggling with.
The other benefit would be that a tax increase would be extremely obvious to all Americans and it would make Congress think twice before enacting one.
This is my proposal. Will it happen? Nope. Not for at least another 3 years. Perhaps Republicans can pick these principles up and nationalize their campaigns based on this and get back into a place where this kind of real change can take place. Am I optimistic? No. Hopeful? Maybe. But I can always wish, can’t I?