Over the past 14 months, I have consistently criticized the liberal and arguably socialist economic policies of President Obama and the Democratic Congress. As pointed out in prior commentaries, these policies will sap the world’s most productive economic system. There are many examples where liberalism and Western European socialism sapped the strength of otherwise strong capitalist economies.
Government policy does not have to sap America’s economy. There are relatively simple policies that, if implemented, can strengthen America’s economy over time. While these policies are simple in conception, they are difficult in practice if there is no political will. These policies require economic sacrifice and political discipline on the part of the American people. They also require Americans to look in the mirror and take responsibility for their own lives. There can be no free rides at others’ expense. These are some of my suggestions to make America’s economy strong again.
No government deficits! Go back to first financial principals. Like prudent individuals, the federal government should not spend more than it receives in revenue. While this principal should be self-evident, it has been almost consistently ignored by western governments since the Great Depression. At that time the great British economist John Maynard Keynes convinced world politicians that deficit spending stimulates the economy. With this economic rational, the deficit genie was out of the bottle. Spendthrift politicians found a justification for spending government money that they did not have. Now that the deficit genie has been out of the bottle for 75 years, it may require a constitutional amendment to force Congress to do the right thing and balance the budget.
Cut government expenses and transfer payments. The government can only solve the present deficit problem by reducing spending. Start with decreasing government payroll. Does the government really need all the additional nonmilitary employees hired since 2000? Was it appropriate for government employees to get pay increases in 2008-2010 when many taxpayers were accepting pay cuts and losing jobs? Government employees make about 40-50% more than private sector employees. Congress should cut government salaries and benefits until they achieve a balanced budget. Congress should take the lead by reducing its bloated staffs, perks and salaries.
In Honor of His 103rd Birthday, Here Are The 20 Best Quotes From The Late, Great Milton Friedman | John Hawkins