This thing ain’t over. The Dow crossed 10,000 a few weeks ago? Big deal. It means nothing. Unemployment is over 10%. Commercial real estate defaults are rising. The nation’s personal debt is still sustainably high. As I wrote in July, this will be a W recession, not a standard V, and we need to batten down the hatches for that likelihood.
But this isn’t all bad as it needs to lead to a re-prioritization of government.
Here’s my philosophy: In 1980 Ronald Reagan was elected based on a great economic experiment. The experiment was that if we cut taxes on the wealthy, the money they saved and spent would go toward services and the revenues would “trickle down” to the other classes.
It didn’t work. What it did do was amass huge amounts of government debt and widen the gap between the wealthy and the poor to levels never seen before in the country. George H.W. Bush tried to reverse this, raising taxes, setting up the Clinton’s balanced budget, and contributing to the greatest economic expansion in the history of this country, all of which was reversed under George W. Bush.
Now I believe it’s time for our government to forge a new contract with the American people. The daddy state will have to be paired back, as the costs of social security and medicare will bankrupt the country. We need to reconsider our roll as military foundation for the world. As India, China, and other countries step up economically, they also need to step up militarily and do their part.
It’s time for a new conversation, one that starts with these basic issues:
- A national discussion about basic services and what we should all get and have funded out of tax dollars
- What our role in international military issues is
- How, as a government, we need to ensure open markets where everyone is working from an even playing field
- How government spending can be focused to provide the biggest bang for the buck, particularly in regards to infrastructure and education
If the U.S. has lost its edge, its that it is no longer the land of opportunity. The saying went that anyone could come to America and become wealthy, anyone could pull themselves up by their bootstraps.
Now it feels the deck is stacked against everyone who doesn’t already come from money or have the right contacts. It’s time for us to recapture the magic.
While I disagree with several of your issues we agree upon a lot. I always enjoy your posts and insights. I disagree that Reagan’s trickle down did not work. Clearly most of the economic expansion we have seen can be tied back to policies Reagan started and the Republican congress expanded in spite of President Clinton (not because of) much of it tied to limiting government.
You have hit on one of my “hot button” issues. Most of my friends consider me a bit more “conservative” than Rush Limbaugh but the American Military and military spending has gotten out of control. I hold the Constitution to be an amazing document created by an remarkable group of thinkers. In most cases conservatives are all for limiting government with the exception of on area – the military. What makes us think we are the worlds police force? The Founding Fathers feared the military as much as limitations on free speech, taxation without representation, and foreign foes. I LOVE the American Military. I am a veteran (US Army Infantry). But we must remember the Military is a GOVERNMENT entitiy. These are Government employees. Why do we have 40,000 troops in Korea? More than 20,000 in Japan? 10,000 in the Balkins? Over 100,000 in Germany? Why are we closing bases in the US and paying foreign goverments to house our troops at extravigant rates? Because the State Department (not defense deparment) says we need to. We need to wake up. It is a tragedy to cut services to our own citizens and burden future generations with debt to protect a world that hates us and does not want, and in my opinion DESERVE our protection. Bring our military home. Protect our borders and have the more than 200,000 soldiers spend their money in our county, buy our goods, and buy homes here. God Bless the USA!!!!
Pingback: The Economics of Fear « Elia Insider