This chart pretty well speaks for itself. Our current situation cannot be blamed solely on the "Bush" tax cuts of almost a decade ago though the cuts may have contributed to the size of the government-inflated real estate bubble which burst in 2008, precipitating the current crisis. Clearly, the projected revenues that motivated those "Bush" tax cuts should have been allocated to debt reduction. Keynesianism only works when surpluses are generated and debt reduced in good times to allow the prescribed stimulus spending in bad times.
Now we need higher tax revenues through lower marginal rates combined with elimination of all special treatment for tax payers. That will help pay off the debt while increasing motivation, through the lower marginal rates, for business and employment growth in the USA. And we need Social Security and Medicare reform to redefine those programs as safety nets for those who truly need them and not as entitlements for everybody. And we need corporate tax reform that will motivate companies of all nations to invest and produce in the USA rather than elsewhere.
And of course we need a free market with transparent pricing and open competition for routine health care and guarantees of the right to buy coverage for catastrophic medical expense. Tax revenue will have to buy that coverage for low income folks, but let it be bought in a free market open to all. We can think about that as we await the Supreme Court ruling on the PPaACA. Unfortunately they cannot vote on whether it is a good law but only on whether it is constitutional. I think the same answer will suffice for both questions.
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The solutions are simple. Raise the revenue, cut the loopholes, and stop going to war. Plus, put Medicare on a more sustainable basis (Not a voucher system).
ReplyDeleteWell, speaking as a congress person, I fear my re-election might be jeopardized if I did such things.
DeleteWell, it is clearly a good thing that the supreme court can vote only on constitutionality and not on whether the law is good or not. My apologies for the error in the penultimate sentence in the posting above.
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