March 10, 2013
President Obama insists on a balanced approach to raise taxes and cut spending to reduce the federal deficit. Both raising taxes and reducing spending will hurt our economy. He doesn’t really want to cut spending. He says he is willing to address entitlement problems (which were made worse by Obamacare), but he offers only vague solutions which fail to address the real issues of excessive and growing Medicaid, Medicare and now Obamacare expenses. Squeezing drug suppliers, doctors, hospitals and insurers to reduce medical care costs is going to reduce the quality and availability of care.
The Republicans were bludgeoned by the president’s misleading demagoguery into raising taxes which they didn’t want to do. They want to cut government spending to reduce the National Debt, but austerity measures are likely to cause a recession and increase, not decrease, the federal deficit. They are using the sequester to cut the rate of growth of government spending. The sequester has been politically successful for the Republicans by exposing President Obama’s demagoguery and scare tactics. However, it requires across the board cuts and, even if modified, will reduce defense spending and result in job losses (as all federal spending cuts do). President Obama will blame everything which may go wrong in our country during the next four years of his presidency on the Republicans even if he has throughout his presidency been weakening our defense and most of the job losses will result from the 2013 income tax increases and the adoption of Obamacare and Dodd-Frank.
Neither party has proposed a plan to promote job creation and economic growth which will come to the aid of the forgotten middle class, increase tax revenues and reduce the federal deficit. Our politicians do not seem to understand that the goal should be to grow the GDP at a faster rate than the the rate of growth of the national debt.
My book entitled Perpetuating Greatness After The Fiscal Cliff examines the economic events after the turn of the century leading to the fiscal cliff and the myriad of problems facing our economy resulting in large part from government failures. It suggests solutions to our economic problems including:
1. Proposed corporate income tax and estate tax law changes to encourage our cash rich corporations and individuals to step up and invest in state transportation infrastructure construction projects to create millions of jobs;
2. A federal mortgage law to eliminate underwater mortgages by enabling homeowners to obtain restructured mortgages and reduce the aggregate of their home mortgages to the fair market value of their home;
3. Ways to modify our entitlements to make them affordable and available to provide quality health care.
4. Modification of the federal income and estate tax laws (including the 2013 tax law changes) to make them fair and to close loopholes to raise revenues without harming economic growth;
5. Changing Dodd-Frank to strengthen bank regulation while eliminating certain provisions which are unnecessarily restricting economic growth;
6. Changing securities regulation to prevent current manipulative practices and the next stock market crash by restricting manipulative short selling practices;
7. limiting interest rates on consumer credit by the adoption of a national usury law;