WASHINGTON -- There are two fundamental things that need to be done to restore America's economy to its former health: reduce government spending and thus shrink its debt, and increase federal tax revenues by boosting economic growth, new-business formation and job creation. A lot of attention is understandably being focused on the former, which is good, but far less on the latter, which would in fact reduce the deficit much faster than the spending cuts.
President Barack Obama and the Democrats have failed on both counts over the past two years. Spending has soared to nearly $4 trillion a year under their wasteful, big-government policies, driving the budget deficit to $1.6 trillion and pushing the national debt to more than $14 trillion.
We're in the midst of a pivotal debate about cutting out-of-control spending -- with Republicans calling for deep budget cuts and the Democrats pushing for much more modest reductions. What has been sorely missing from this debate is a clear, strong voice for tax incentives, which would boost faster job-creating economic growth and raise enough revenues to pound the deficit into submission.
Obama still thinks raising taxes will bring in more tax revenue, and he continues to blame the previous Bush administration's tax cuts for all of his fiscal and economic woes (which Obama has made worse on several counts): higher long-term unemployment, budget deficits, government debt and weaker federal revenue.
Last month, in a speech at George Washington University here, the president continued to blame George W. Bush for the ills that still afflict his presidency -- more than 9 percent unemployment in nearly half the nation's states and an anemic economy barely growing at a feeble 1.8 percent in the first three months of this year.
"We increased spending dramatically for two wars and an expensive prescription-drug program -- but we didn't pay for any of this new spending. Instead, we made the problem worse with trillions of dollars in unpaid-for tax cuts," Obama declared.