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November 2, 2009
Exclusive: We’ll Be America Again
Peggy Noonan captured the frustration of Americans in the Wall Street Journal article We're Governed by Callous Children. Those citizens that know best how the country works have lost faith in their leaders and their experts. They are violently opposed to the direction the country is taking. Increasing taxes, imposing paralyzing regulations and triggering penalizing inflation has made the angry.
She warns that without some drastic change in direction Atlas will shrug – rich people will stop working to grow the economy because their efforts are dissipated away by punitive taxation. One million people have already left New York City to escape that city’s and that state’s taxes. This exodus highlights the country’s economic dilemma – the only remedy that New York City and New York State have to replace the tax revenues lost by the exodus is to raise taxes on those remaining. Raising taxes on those less able to pay will only exacerbate the problem. Taxes are inherently the problem.
- The biggest long-term threat is that people are becoming and have become disheartened, that this condition is reaching critical mass, and that it afflicts most broadly and deeply those members of the American leadership class who are not in Washington, most especially those in business.
The politicians in Washington have run up $72 trillion in debt and promises and have taken over or have threatened to take over massive segments of the business sector. The current Administration has proposed and enacted legislation that will further burden and eventually cripple business and the economy. The anti-business, anti-profit, pro redistribution direction the present administration is promoting is so contrary to the precepts of the U.S. Constitution the American people and business leaders are waking up to the fact that “their America” is in the process of being transformed from its present semi-socialist/capitalist state into a full-blown collectivist nightmare bordering on communism.
A depressing condition has developed – the people don’t believe the politicians of either party can restore American exceptionalism.
- This is historic. This is something new in modern political history, and I'm not sure we're fully noticing it. Americans are starting to think the problems we are facing cannot be solved.
- Part of the reason is that the problems – debt, spending, and war – seem too big. But a larger part is that our government, from the White House through Congress and so many state and local governments, seems to be demonstrating every day that they cannot make things better. They are not offering a new path, they are only offering old paths – spend more, regulate more, tax more in an attempt to make us healthier locally and nationally. And in the long term everyone – well, not those in government, but most everyone else – seems to know that won't work. It's not a way out. It's not a path through.
This attitude should not be a surprise. The two major parties have participated in running up a $72 trillion debt while they massage the people with the justification that “social justice” must be served. They spend money they don’t have and make promises they can’t keep. Financially both parties have lost sight of the Founder’s “limited central government” construct and spent the “government” into bankruptcy.
When spending taxpayer money is your only remedy for every problem, your country needs saving from itself. It was built on a market economy, not a big intrusive government that punitively taxes its citizens. In fact our Founders fought to free themselves from England’s big intrusive government and their taxes.
We need to relearn the lessons of the past to correct our current financial deterioration. We need to use them to reinvigorate our economy. Our Founders did not include the capability of the .U.S Government to tax income or wealth of its citizens in the Constitution. They designed a market economy that relied on the individual to make his way without having to depend on government.
The fact that the industrialization led to a revolution in transportation was no reason for government to expand its reach to every element of social endeavor. Using the 16th Amendment to the Constitution to tax incomes of the people was not intended to empower government to tax just about everything it currently taxes.
The greatest misuse of the government’s power to tax was the creation of government entitlements. They now amount to 58 percent of our national budget. Social Security, Medicare, Disability, Medicaid, etc. were never mandated powers under the Constitution. However, during the collectivist movement of the 1930s, the entitlements “industry” was born in Washington.
Subsequently the greatest mistake Washington made was to raid the Social Security fund and put entitlements on a pay-as-you-go basis. This has morphed today into the tragedy that payroll tax collections exceed income tax collections and the people are universally ignorant of this fact.
Payroll taxes bleed $1.3 trillion from taxpayers every year – personal income taxes only $1 trillion. Instead of being used by taxpayers as capital to fund economic growth payroll taxes are sent to Washington to fund entitlements and unapproved expenditures. So if we are to revitalize the American economy today, changing the way we fund entitlements is a must. These programs are unsustainable and the benefits will be lowered and taxes will be raised if nothing is done about them.
The logical thing for the country to do is to replace the current programs. If possible, they should be replaced with programs that increase benefits and reduce overall tax. This sounds counter-intuitive but it isn’t. If we construct our program on our Founders’ principles, we will let the taxpayer keep the ownership of his payroll taxes. He then puts them in a non-invasive investment account and immediately invests them in the stock market to explode the growth of the economy.
If the citizen understands that such a plan would eventually make him a millionaire and pull the country out of the recession at the same time his current belief that nothing can be done to better the country will be replaced by the belief that America is still that “shining city on the hill” – a most exceptional place.
We will be America again. See here for the “path” to take.
FamilySecurityMatters.org Contributing Editor Dick McDonald is formerly a CPA at Arthur Andersen & Co. Dick maintains a website at www.riseupamerica.us.
Reader Comments: Submit Your Comment (1) | Sign Up for FSM Updates!
I am not like a lot of americans the are looking for and end to this war...it will be ongoing for years to come and I think americans need to grow up, wake up. We can put it in "peace" mode for awhile, but the enemy is out there and not giving up.
posted by: tom_dashel
Monday, November 2, 2009 at 08:24 AM
