The ongoing debate on the\u00a0so-called “jobless recovery” is intensifying. The Obama line is that his aggressive\u00a0(massive) spending “saved the economy from the brink” and current\u00a0stagnation is\u00a0part of a long term problem created by\u00a0Bush ineptness. Finishing the job\u00a0requires more government intervention and debt, as the free market is simply unable to do the job without government supervision. The notion of a second stimulus has been bantered around by\u00a0some on the left as well.\u00a0<\/p>\n
Republicans\u00a0have largely rejected the Obama narrative, but\u00a0don’t seem to be\u00a0clear about what should be done. Some are suggesting business tax credits\u00a0for new\u00a0hires or temporary income tax cuts. These are not\u00a0bad ideas per se, but they don’t directly address the core problem, harmful government intervention in the economy. It’s crucial that Republicans reject the Keynesian thinking and social engineering that got us into this mess in the first place, and these ideas don’t quite hit the mark.<\/p>\n
The notion\u00a0of a temporary tax cut is appealing at first glance, and is certainly better than more government spending. The problem with this proposal is that tax cuts only reduce the size of government when they are\u00a0permanent and\u00a0are accompanied\u00a0by spending reductions. The\u00a0Obama balance of high taxes and higher spending is unsustainable and economically irresponsible. A temporary tax cut suggests that\u00a0Obama’s approach may not be optimal at the moment, but\u00a0could be\u00a0workable when the economy recovers. Nothing could be further from the truth.<\/p>\n
Likewise, a tax\u00a0credit for businesses that hire workers\u00a0could have some short term positive benefits.\u00a0But providing a temporary tax break for new hires encourages companies to hire workers\u00a0whose value to the business would be less that the wages they pay.\u00a0Such a program amounts to a government subsidy, and layoffs will\u00a0follow when the tax credit\u00a0expires.\u00a0If businesses cannot afford to hire workers, then why not reduce their regulatory burden and taxes on a permanent basis?<\/p>\n
Obama’s massive government intervention has failed, and\u00a0Republicans\u00a0must decide how to respond. One option is to\u00a0propose a\u00a0blend of conservative and neo-Keynesian programs that don’t address the core problem of fiscal irresponsibility and Constitutional neglect. The pundits tell us that such a proposal would attract moderates to the fold. Bush drifted in this direction during his presidency and lost the conservative base. McCain tried a similar approach in 2008 and never got it back.<\/p>\n
Another option is to\u00a0tell\u00a0the complete truth. Many Americans sense\u00a0something\u00a0terribly wrong with\u00a0Obamanomics and\u00a0are open to an alternative. The\u00a0left’s healthcare package wreaks of\u00a0big government and\u00a0restrictions on individual liberty, and those who thought the\u00a0Dems were about responsible change are seeing the party\u00a0for what it really is. Republicans have a\u00a0chance\u00a0to\u00a0propose a real solution, not just a shift to the middle.\u00a0<\/p>\n
So what should a real solution look like? Here are a few pieces of the puzzle:<\/p>\n
1. An immediate halt to\u00a0all stimulus spending.<\/p>\n
2. Permanent tax cuts, including a simplified flat or fair\u00a0tax system,\u00a0a substantial\u00a0cut in the capital gains tax, and the elimination of wealth transfer through the tax code (i.e., earned income tax credits).\u00a0<\/p>\n
3. A substantial reduction in the size and scope of government that brings about spending cuts and reduced regulatory burdens on business.<\/p>\n
4. A reorganization (if not elimination) of the Fed to end its meddling in the economy.<\/p>\n
5. An end of global negotiations on climate change. The evidence for anthropogenic global warming is spotty at best. Cap-and-trade and other socialist schemes should be summarily rejected.<\/p>\n
If you think I sound a little extreme, you’re right. Capitalism is the solution to our economic problems and need not be “kept in check” by bureaucrats. We owe no apologies for a system that\u00a0created the wealthiest nation on earth.\u00a0It’s time we take a real stand. The Dems have given us a perfect opportunity to do so. We might not get another chance.<\/p>\n","protected":false},"excerpt":{"rendered":"
The ongoing debate on the\u00a0so-called “jobless recovery” is intensifying. The Obama line is that his aggressive\u00a0(massive) spending “saved the economy from the brink” and current\u00a0stagnation is\u00a0part of a long term problem created by\u00a0Bush ineptness. Finishing the job\u00a0requires more government intervention and debt, as the free market is simply unable to do the job without government […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/168"}],"collection":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=168"}],"version-history":[{"count":0,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=\/wp\/v2\/posts\/168\/revisions"}],"wp:attachment":[{"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/battle4liberty.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}