Now that the election campaign is over, it is time for President Obama to show some leadership in resolving the economic woes facing America. The first step is to avoid going over the “fiscal cliff” that the President and Congress foolishly created by their inaction over the last two years.
There is no semblance of leadership coming from the president. We hear bottom lines of insisting on tax rate increases, refusals to address entitlement reform, no specific spending cuts and nothing serious to address our obscene national debt.
The Tea Party was spontaneously created to address the problem of an intrusive government, high taxes and an unsustainable national debt. The Tea Party Express stands ready to find common ground with the president if he is willing to really work with both parties and abandon his campaign rhetoric.
The president should start by proposing serious cuts in federal expenditures — not just reductions in planned increases, but serious streamlining of the federal government and the elimination of unnecessary federal programs. A good start would be moving most means-tested programs to the states in block grants with the authority to redesign the programs more efficiently.
With $16 trillion in debt, plus $86.8 trillion in unfunded entitlement liabilities, it’s time to face reality. Stop trying to fool the American people that the situation is under control. We cannot continue to allow America to travel down an obviously unsustainable path, but we can work together to figure out what and how we cut excessive spending.
Nevertheless, it is naive to believe austerity alone will sufficiently address America’s fiscal woes. Rational spending cuts and devolving programs to the states are only part of the solution. We must have stronger pro-growth policies in effect.
History has shown time and time again that growth is induced when you have a low tax and regulatory environment. Check the records of Presidents John F. Kennedy and Ronald Reagan. We have created a new avalanche of government regulations that make starting and expanding businesses a nightmare. Let’s get rid of some. Try to get a home loan and wade through the volume of paper to get a feel of how ridiculous over-regulation has gotten.
Contrary to Obama’s demagoguery, his proposed tax increase on high incomes produces little revenue and punishes the people and small businesses that produce the investment and new jobs our citizens need. In the most recent statistics from the IRS, the Bush tax cuts resulted in a revenue gain to the government from high-income individuals. The top 1 percent paid 23 percent more in taxes from 2000 to 2007. They paid 40 percent of the total taxes paid, compared to 37 percent in 2000. The bottom 50 percent ended up paying 16 percent less.
With that said, there is nothing in the Ten Commandments about the Bush tax rates. They are not sacrosanct. But there is a ton of empirical evidence that shows that raising marginal tax rates hurts the middle class and poor who are dependent on new jobs being created.
We can generate new revenue by reducing many of the loopholes, deductions and credits from the tax code. The tax code has exploded with special favors that benefit special interests. The tax code is too burdened with provisions that wealthy individuals with teams of lawyers and accountants can use to avoid paying taxes, not to mention the collection of favors to the crony capitalism that Obama seems to prefer to free markets.
Raising tax rates instead of eliminating special favors in the tax code is far less efficient in raising revenues and providing for more economic growth. It isn’t the wealthy that would pay the tax increases Obama proposes, but it the Americans trying to become wealthy.
Finally, it is important that America have a sound dollar that is not manipulated by the Federal Reserve. The president should name a bipartisan Gold Standard Commission to investigate the benefits of returning to a gold standard to assure greater economic prosperity in the future.
It’s time to put the partisan politics aside and face economic reality. Obama’s election victory decided one thing — Americans want him to lead. The time is now, and Obama must drop the political games and be the leader Americans thought they were getting in 2008.
Russo is the co-founder and chief strategist of the Tea Party Express, the largest Tea Party political action committee.