Many countries have chosen to have the government run the economy. They chose to allow government to decide which companies survive and fail. They chose to allow government to determine which industries are rewarded. The problem is that when government controls the economy, those who can influence government keep winning, and everybody else stays the same. In those countries, the employee never becomes the employer, the small business can never compete with a big business, and no matter how hard your parents work or how many sacrifices they make, if you weren't born into the right family in those countries, there's only so far you can go.
So what do we do to avoid their fate? Here are some commonsense ideas that will help reverse the trend we are on and put us back on the right track:
First, we should freeze non-defense and non-veteran discretionary spending at pre-Obama levels. Though it’s a relatively small part of the budget, non-defense and non-veteran discretionary spending has ballooned in recent years and must be brought under control. We should cancel the unspent stimulus funds, repeal a TARP program that has evolved into a revolving bailout and slush fund, and sunset discretionary spending programs every 10 years after the Census. This will force our political leaders to evaluate the success and cost effectiveness of each and every government program on a regular basis. Lastly, we must also rein in the size and compensation of federal government workers. We need a freeze on civilian employment and adjust their pay and benefits, which are now some 70% higher than their private sector counterparts.
This freeze has to be enforced by a 21st century version of a Gramm-Rudman-type sequester. Again, politicians in both parties have demonstrated their unwillingness to control spending. If they keep refusing, we need a mechanism to do it for them. Additional safeguards, like a Balanced Budget Constitutional Amendment with a supermajority to raise taxes, and a line-item veto would be valuable long-term. However, given the current Congress’ penchant for massive spending, taxpayers shouldn’t hold our breath in the short term.
The second needed step is to reform our entitlement programs and prevent their impending bankruptcy. Here’s a simple fact: Social Security, Medicare, and Medicaid are going broke. They are like sticks of fiscal dynamite whose wicks are getting shorter by the day. We have to tell the truth and admit what’s obvious: for today’s seniors and those over 55, we won’t make changes. But for those like me who are under 40, the programs will need to change.
The third thing we must do to avoid a diminished future is grow our economy and create jobs. We should start by extending the pro-growth Bush tax cuts rather than allowing them to expire as President Obama and Congressional Democrats have proposed.
While this is an important short term fix, it isn’t a long term solution. Our tax code is fundamentally flawed. Too many years of special interest lobbying and class warfare politics have cemented it as anti-family, anti-jobs, and anti-competitive. We must make it simpler, fairer and less complex.
We should start by ending double taxation. Every dollar that is legitimately subject to tax should be taxed. But we should stop giving Washington two or even three bites at the apple. That means no more job-destroying double taxation of capital gains, dividends or death.
Also, if big government Europeans think a 25% average corporate tax rate is high enough, then we should tear down our 35% rate so it’s no higher than the European average.
Unfortunately, the fourth thing we must do to avoid a diminished future is a reaction to President Obama’s agenda. We must repeal the big government monstrosity that is his health care law and replace it with something better. One firm alone, Caterpillar, has said it will cost them $100 million dollars. Think about that in terms of lost jobs, lost wages and broken dreams across an entire economy. This law is bad health policy and even worse economic policy.
Fortunately, this damage to America’s long-term future is not irreversible. However, with each day that passes and each tough decision that is deferred, our economic and fiscal challenges only mount.
As Americans, we have reached a point in our history when we must decide if we are to continue on the free market, limited government path that has made us exceptional, or if we are prepared to follow the rest of the world down the road of government dependency. It is a clear choice between two very different futures, and I believe the American people are prepared to make the tough, but necessary, choices to ensure future generations enjoy unrivaled levels of freedom, security and prosperity.