Excellent post. The article quite correctly points out the dangers we face as a nation by ignoring our long-term fiscal health for only short-term political gain:
"...we should all care because, when the government wastes our money, we all suffer. The result is lower economic growth, more unemployment, lower incomes and greater pressures for destructive tax increases."
"... When the Republicans took control of the Congress in 1994, they were able to checkmate President Clinton's spending proposals and vice versa. The result was that federal government spending dropped from 20.7 percent of gross domestic product in 1995 to 18.4 percent of GDP by 2001."
>>> Correct. This is why the American public uniformly supports 'divided government'... not letting any one party control all the levers of power. The public believes - with good reason - that if any one group gets total control they will lard it all out to their backers and pet projects, and the nation will suffer. As Mark Twain once said: "When Congress is in session, no man's wallet is safe."
"This reduction in the relative size of the federal government was a major cause of the economic and stock market boom. Now, however, a strong reversal in government spending is under way, and not just because of the additional costs of the war on terrorism. The Congress has been engaged in a wild, bipartisan, non-defense spending spree that has not, to date, been vetoed by the Bush administration."
>>> Correct, both parties have engaged in a wild spending and special interest payback campaign to reward their backers... all with ZERO consideration to the long-term national interest. Bush has participated in this spending and protectionist spree... and has not had *one single veto* yet. (As a comparison, at a similar point in his Presidency, and in an effort to restrain spending, President Truman was averaging one veto a week!)
"...As a result, private sector spending and investment are being crowded out...."
>>> Crowded out by the rising national debt, that is.
"... This means that for every additional tax dollar, the government gets to spend, our GDP growth is reduced by almost $3. Few government programs provide $3 worth of benefit for each dollar spent on them."
>>> Correct. Investments in the private economy ALWAYS have a greater velocity than government spending.
"... The solution is simple. Reduce the growth rate of government spending,"
>>> Oh, yes!
"...reduce tariffs,"
>>> That's: protectionism, as in steel tariffs, lumber tariffs, textile tariffs, sugar price supports, sky-high agricultural price supports, etc., which must be SLASHED!
"...cut taxes on productive economic activity, repeal foolish and expensive regulations, and stop driving away foreign investors who wish to invest in our economy."
>>> A-man again! How about starting by ELIMINATING the world's most complicated tax code (ours), and starting fresh?
"...We have met the enemy, and it is those we elected, because they told us they were our responsible friends. But true friends do not steal our economic future." |
