Many Americans believe that the recession will soon be over if we just raise some tax revenue, make a few cuts, and stay the course. They’re sure that the pull back from expensive and unsustainable entitlements in Europe and the riots in the streets of Greece can’t happen here.
Like teenagers on a parent’s credit card, our government keeps spending like someone else will pay for our exploding debt. But with the number of Americans facing imminent foreclosure and out of work, it’s clear that the stimulus plan, the “cash for clunkers,” the “shovel-ready” projects, and the bailout of companies “too big to fail” failed to produce a strong economic rebound.
When the Democrats were in control of both houses of Congress and the Presidency, they failed to even pass a budget, much less propose needed cuts. With the August 2 deadline for raising the debt ceiling closing in, they seem more focused on playing the political blame game—it’s those evil Republicans again who want to take away your pensions and your entitlements and push grandma off the cliff!
President Obama continues to talk about “shared sacrifice” by taxing the rich who can “afford it.” Those “rich” Americans who have the funds to be part of the solution aren’t investing in new businesses or creating new jobs because they’re uncertain as to what new taxes, costs, or regulations they’ll be facing. Instead of being honored and rewarded for producing tax revenue and jobs, they know that they’re the “only Americans” to be sacrificed! It’s time for true “shared” sacrifice, opportunity and community.
Instead of expecting more sacrifice from the same 5% of citizens who pay more income taxes than the rest of Americans combined, we could learn from Russia. In the former Soviet Union, they used to say, “They pretend to pay us, and we pretend to work.” The government controls and heavy taxes turned business underground. Over 50% of their economy was “on the left” involving hard currency or barter, but not anymore!
In 2001, Russia became the largest country to implement a flat tax of 13%. With that true “shared sacrifice” by everyone, the value of the ruble has stabilized and government revenue grew 624% from 2000 to 2007 (175 to 1,267 billion rubles). Russia’s economic recovery is far more robust and stable than our own.