I'm not an economist and I don't play one on television. I never had an economics course in college. I am reasonably bright and thoughtful and I'm very good at looking at issues from every side, including the ones with which I don't agree. I'm also very good at realizing that things are rarely if ever simple and that complicated issues usually don't have simple solutions. All that said, there are multiple issues in the current economic discussions that strike me as stupid.
A couple of assumptions. I believe in taxes. They are part of the social contract. If you don't want to pay taxes you have two options... lower your income to the point that you drop below the threshold or move someplace like Somalia.
I believe in government. There are some things that the free market cannot or will not do that must be done. There are some things that non-profits and religious organizations cannot do that must be done. Civil society requires a strong and active central government.
Nobody does it all on their own. We all stand on the shoulders f someone who stood on the shoulders of someone who stood on the shoulders... and because of that we all have a responsibility to maintain the larger system for those who come after us.
1. The argument goes that if we tax wealthy folk, they will not invest and if they do not invest, we will not have new jobs. Let's think about that one for a second. If someone makes an investment, they get a tax deduction for that investment. So, doesn't it follow that a higher tax rate encourages investment? After all, why give the money to the government when you can do something positive with it? On the other hand, if there is no tax incentive to invest, why take the risk? It makes sense to me that higher tax rates encourage rather than discourage investment. And that is before we look at the raw data. W dropped taxes on the wealthy to an historic low and we lost rather than increased jobs. The times when we had significantly more economic growth all had significantly higher tax rates on the wealthiest Americans. The higher rates then increase revenue in two ways. If the wealthy do not invest, they pay higher taxes. If they do invest, the tax rolls increase as jobs are created.
2. Debt reduction/government austerity seems to me to be a stupid plan when the economy is so weak. Take 20 million dollars out of the economy tomorrow and what happens? Everything falls a little lower. Low and middle class folk tend to be money in, money out folk. They spend their income because they have to and that feeds the economy. They purchase clothing or food and that creates or sustains jobs for other folk who then spend their income and it goes around and around. Cut unemployment or aid to poor families and the cycle stops. Let's look more long term. Cut student Pell Grants and other student aid and some students will not be able to go to college. 4 years later, we see a significant drop in capability of the work force and we all pay for that. Let the infrastructure continue to fall apart and moving goods costs more which raises prices which causes everything to slow down more and that spiral goes down. Laying off government workers adds to the unemployment roles and decreases economic productivity rather than increasing it.
3. Healthcare costs are central to the debt discussion. We have the highest costs in the world but by no means the best results. Many studies have suggested fixes but none will be easy and politics rather than economics or health are the problems. S+We need someone with cajones to look at long term real solutions.
4. The military. Nobody is going to suggest that we dismantle our military superiority... but we don't need to fund an empire. End the wars. Close the bases all around the world and bring those folk home. Then put them to work rebuilding America. Engage the companies that are building weaponry to build green technologies and come up with ways to reduce dependance on oil so we can defund the Middle East's terror machine. Finally build a national Peace Academy that studies how we promote peace, justice, & development. How many War Colleges do we have? Doesn't it make sense from a security standpoint to put some of our best minds to the study of what makes for peace? Take a percentage of the money we spent supporting an empire and use it for foreign aid. Build schools, especially for girls. Support infrastructure, education, and industry in the developing world.
5. Entitlements? As for Social Security? I'd raise the maximum income on which the tax applies so the tax is not so regressive.
Medicare? Remove the constraints that support big pharma and learn from places where Medicare costs are lower (Minnesota for example) and duplicate those ideas in places where costs are higher (Texas). The problems are systemic and shifting the costs to the elderly and the poor is not an acceptable or workable solution.
6. Get realistic in the discussions. Again and again we hear politicians saying that we should run the government like a family and every family has to have a balanced budget. First off, I don't know any families that do not borrow. We have mortgages. We have car loans. We have credit cards. Second, I don't know any family that defunds basic needs. If my wife is diagnosed with a serious illness... I'll borrow to get her treatment. Yes, I may/will forego some purchases and choices but I would not stop basic needs. I would not decide to stop eating because I have to pay medical costs. And if there were any way possible, I would not decide to stop medical treatments so I could pay to eat. I would borrow as much as I possibly could.
The entire discussion of a balanced budget amendment is just stupid. Imagine if there had been such an amendment during WWII. "Sorry, we can't invade Europe... there isn't any money."
So... my solution to the current mess... First, a government jobs program. Get unemployed folk out there working to rebuild our crumbling infrastructure. Reduce rather than increase costs for education so that we can actually compete on a global scale. Spend more rather than cut. Increase taxes on the wealthy and remove loopholes for corporations while at the same time increasing tax benefits for investments that either create jobs or rebuild infrastructure. Reduce military expenditures and put those funds in productive areas.