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Dear Mr. President: We Cannot Spend our Way out of Debt

Written on Wednesday, October 31, 2012 by

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Ronald Reagan was prescient when he said: “We don’t have a trillion-dollar debt because we haven’t taxed enough; we have a trillion-dollar debt because we spend too much.”  In the first place, wouldn’t it be nice if our national debt were only a trillion dollars.  Who would have ever dreamed that Americans would look back on the days of a one-trillion dollar debt as the good old days?  President Obama’s misguided economic policies have increased America’s debt many times the comparatively paltry trillion dollars Ronald Reagan talked about.  Yet, President Obama refuses to accept what even a “C” student in Economics 101 would advise: cut spending and reduce taxes.  Instead, the President prattles on about the evil rich, pandering to the poor and promoting class envy instead of taking positive steps to solve America’s economic crisis.  If Barack Obama were a heart doctor, he would advise his obese patients to eat plenty of fats and avoid exercise of any kind.

Before criticizing the wealthy and stirring up class envy, President Obama would do well to read the works of Ayn Rand, particularly where she wrote: “American abundance was created not by public sacrifices to the ‘common good’ (taxes), but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes.  They did not starve the people to pay for America’s industrialization.  They gave the people better jobs, higher wages and cheaper goods with every new machine they invented, with every scientific discovery or technological advance—and thus the whole country was moving forward and profiting, not suffering, every step of the way.”

President John F. Kennedy was actively pursuing a major tax cut when he was assassinated.  It fell to Lyndon Johnson to get the Kennedy tax cut through Congress.  Ironically, Democrats use to understand the correlation between tax cuts and economic growth.  In spite of the eventual massive spending on his “Great Society” programs, even Lyndon Johnson knew that the best way to increase government revenue was to stimulate economic growth through tax cuts.  In fact, he wanted the tax cuts precisely because they would generate the revenue he needed to fund his “war on poverty”  If Johnson—at the time the biggest government spender since FDR—got it, why can’t Barack Obama?

The key to a real economic recovery is to simultaneously cut spending and taxes.  The economic problems America has been suffering for the last four years are the result of a simple truth: What is popular politically is not necessarily beneficial economically.  Anthony Randazzo of the Reason Foundation developed a seven-point tax-cutting plan for getting America’s economy operating on all eight cylinders again.  The plans includes the following: 1) Across-the-board cuts in taxes for individuals and businesses, 2) Reduction of FICA payroll taxes, 3) Specific tax cuts for small businesses, 4) Reduction of corporate taxes, 5) Tax holiday on all Wall Street investment returns, 6) Tax cuts on anything related to infrastructure investments, and 7) Elimination of fees and fines for accessing retirement accounts.

This seven-point plan coupled with appropriate cuts in federal spending will turn America’s economy around in short order.  President Obama and his fellow travelers in Congress celebrate even the most minor signs of an economic recovery but the truth is this: Any evidence of an economic recovery under the current circumstances is simply a testament to the resilience of the American economy.  In other words, our economy is so resilient that it can sputter along on three or four cylinders in spite of the massive spending of liberal statists.  However, just sputtering along is not sufficient to get 13 million Americans back to work or to compete on the global stage with China, India, and other emerging industrialized nations.  Because of our national debt America is like a sprinter that must pull a 500-pound anchor behind him while other countries such as China and India run the global race uninhibited.  Unshackle our economy from the leaden anchor of national debt and America will once again take the lead in the global race with China, India, Japan, Korea, and any other country.

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