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"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."
--Alexis de Tocqueville, Democracy in America
Friday, June 3, 2011
More Gloom, and a Prescription for the Antidote
Here's the lede from an article by Michael Walsh in the New York Post:
Private-sector job growth is ane mic, new jobless claims are still well over 400,000, the unemployment numbers are grim, manufacturing has slowed to a crawl, home prices are falling again, the dollar keeps sinking, 44 million people are now on food stamps, layoffs continue, consumer confidence has hit the skids and the stock market lost 280 points Wednesday and 38 more yesterday.
Welcome to Recovery Summer II.
Ouch. Walsh goes on:
For what it's worth, Moody's is warning that, absent some agreement to avoid short-term default, it may downgrade the nation's credit rating. "We are on the verge of a great, great Depression," charged analyst Peter Yastrow.
And where was President Obama as this disastrous week began? Just back from a European mini-vacation, he was out on the links again on Memorial Day, playing his 70th round of golf since he took office. Leading from behind, anybody?
Double ouch. Look, here's what we need:
1. Lower individual tax rates to where they were after the Reagan tax cuts in 1988, with two brackets of 15% and 28%, period.
2. Lower capital gains tax rates to 10% to encourage investment. The maximum amount the federal government has ever received from capital gains tax collection has been around $120 billion, when the rates were 20%, and the stock market was roaring at the end of the tech bubble in 2000. That seems like a lot, sure, but in terms of the federal budget as a whole, it would pay for about 3% of our total spending. That's not enough to offset the drag on the economy created by hamstringing investors and capital.
3. Enact a five-year moratorium on new federal regulations unless they directly and demonstrably impact public health.
6. Permit and encourage offshore drilling in the Gulf of Mexico and the Pacific off California. Permit and encourage drilling for oil and natural gas everywhere in the continental U.S., including in Alaska's National Wildlife Refuge (ANWR).
7. Cut federal government spending immediately by 10% this year, and another 10% next year, and another 10% the year after that. Put America on a path to a balanced budget within five years.
In short, we need certainty for investors that their investments won't be taxed away or threatened by unpredictable regulatory confiscation; we need sobriety in our government spending to convince world markets that we are serious about our fiscal health; and we need energy independence. Certainty, sobriety, independence.... those should be our watchwords, and our slogan ought to be "America Is Being Run By Adults, and Is Now Open For Business Again."