Fri, 09 Jan 2009 03:59:07 +0000 – By Jon Kraushar Communications Consultant
[caption id="attachment_5092" align="aligncenter" width="300" caption="President-elect Barack Obama gestures during a news conference at his transition office in Washington on Jan. 7 (AP)"][/caption]
It remains unclear exactly what Obama is proposing to stimulate the economy but best I can tell it's a dog's breakfast of 60% government public works projects (that Obama unbelievably claims won't include "pork" aka wasteful spending and earmarks) and 40% tax cuts (mostly one-time rebates and tax credits) which will likely spur more Americans to saving (as the Bush tax rebates proved last year) than spending. In the beginning, Obama said his total economic turnaround plan would cost about $775-billion. But lately he is suggesting that the plan will cost $800-billion which means that he is really heading for the $1-trillion mark.
In sum, most of Obama's "jolt the economy" plan relies on the government to select and oversee spending projects that it claims will stimulate an economic revival. That is a notorious recipe for disaster -- in case you hadn't noticed how well this same approach turned out in centrally planned Communist and Socialist economies.
What would Reagan do if he (rather than Barack Obama) were our next president? He'd reverse Obama's paradigm, relying on private citizens and private enterprise rather than big government to spend money not from tax rebates or tax credits but from ongoing tax cuts aimed at lowering the taxes that citizens actually pay.
And then we have the example from our own country, when our government has subsidized "winning" and/or "green" projects like ethanol (which does a great job of spending billions while raising food prices). Much of the rest of Obama's recovery plan relies on one-shot, quick fix tax rebates that didn't work for Bush, the man Obama blames for everything wrong with the economy.
Since Obama will chiefly need the collaboration of a Democratic Congress and the vast federal bureaucracy to push through his stimulus program (and the continuation of the disastrous Bush-Paulson bailout boondoggles), we will wind up relying on those fabulous folks who brought us Fannie Mae and Freddie Mac for economic salvation. And there's more -- We're also at the mercy of tax-dodging Rep. Charlie Rangel (D-NY), who is the chairman of the House Ways and Means Committee which oversees U.S. tax policy. This is the gang that can't shoot straight--except to the foot.
When he was president, Reagan tried (but did not always succeed) to shrink rather than grow government in its size, spending and influence. Reagan compared government to a baby having "an alimentary canal with an appetite at one end and no sense of responsibility at the other." Reagan said, "Government does not really solve problems; it subsidizes them. And it does not produce a dime of revenue. It can spend only what it takes from the pockets of the working men and women of this country."
So, what would Reagan do if he (rather than Barack Obama) were our next president? He'd reverse Obama's paradigm, relying on private citizens and private enterprise rather than big government to spend money not from tax rebates or tax credits but from ongoing tax cuts aimed at lowering the taxes that citizens actually pay. This worked for Reagan and for the country just as it worked after John F. Kennedy died and his advocacy of tax cuts was followed (temporarily). It not only stimulated the economy; it raisedgovernment revenues.
Reagan said that, "...growth, prosperity, and ultimately human fulfillment, are created from the bottom up, not from government down." What this means is giving money and power to the people, not the politicians.
Reagan defined as "the backbone of our country: Americans helping themselves and each other, reaching out and finding solutions--solutions that government and huge institutions can't find."
Reagan famously said, "Government is not the solution to our problem; government is the problem." At a time when Obama is saying the opposite, what do you think?
Communications consultant Jon Kraushar is at www.jonkraushar.net.
Communications consultant Jon Kraushar is at www.jonkraushar.net. He is a consultant to corporate and political leaders including Steve Forbes.