Dan Freeman’s attempt to frame America’s debt crisis in a political “us versus them” scenario is a disservice to voters (“US economy lacks a resilience once part of its DNA,” The Daily News, May 28).
He speaks of the famed “Obama recovery.” The data demonstrates that it was the weakest economic recovery on record despite being the most expensive at the time. In President Barack Obama’s first budget the food stamp program cost American taxpayers over $53 billion. By the end of the “Obama recovery,” the food stamp program had grown to over $68 billion and participation had increased 21 percent.
If one uses the efficient application of taxpayer dollars as a guide, Obama’s administration increased government receipts by 53 percent while only growing the economy by 16 percent. This easily qualifies as the worst economic performance among his four predecessors.
Increasing taxes to improve poor economic health can work but only if you also reduce government spending. Removing economic power from taxpayers while increasing government’s economic power simply gives the government more economic freedom than the people it serves — be they billionaires or minimum-wage workers.
The Democrats’ favored method of managing an economy stems from John Maynard Keynes — the most influential economist of the 20th century. Put simply, his theory was that governments should “spend against the wind.” In bad times they should lower taxes and run deficits. In good times they should raise taxes and reduce government spending.
Therein lies the problem. In bad times, both sides agree — taxes are lowered, and government spending is increased. But in good times, the Democrats want to increase government spending while the Republicans want to lower taxes. To compromise and avoid making hard decisions, Congress does both. Last year’s debt interest payments neared $600 billion.
The simplistic notion that taxing the rich will cure our fiscal ills was tried in the 1970s in Great Britain while under socialist government rule. That ended poorly and the country came within hours of having to declare bankruptcy.
Then Margaret Thatcher arrived and set out on a plan to give economic power back into the hands of the most efficient allocators of capital — the people. She sold hundreds of billions of dollars of government assets into the private market. She turned an economic disaster into an economic mecca.
Since then, people have complained that the benefit wasn’t evenly distributed. To them, I say that it has never been a democratic government’s job to make everyone equal in terms of economic benefit. The government’s job is to make sure that everyone has equal access to economic benefit.
Freeman’s proscribed treatment for a 21st-century economic illness is straight out of the 1970s and has been proven a failure. How about we try what works with a 21st-century twist? Slash government spending by eliminating all subsidies to citizens and corporations.
Replace any lost value to the needy by implementing a means-tested universal basic income thereby granting more, not less, economic power to those who need it most. Power to the people.