America has a growth deficit. As the latest job report shows unemployment reached 9.2% — the highest rate of 2011 — investors and employers continue to react negatively to this bad news.
During the three years of the Obama administration, in this dismal economy millions of Americans have been forced to take jobs that they are overqualified for or they have simply given up looking for work entirely. If you include those workers, the real unemployment rate is higher than 16.2% by conservative estimates.
These numbers are far worse depending on geography, with the most glaring examples of misguided economic policies being in poor urban communities.
Capital always follows the path of least resistance and greatest opportunity. But not only has President Obama’s continuation of endless deficit spending not resulted in so-called Keynesian “pump priming” and economic growth, it has discouraged private investment as money continues to flow into safe havens like Treasuries.
As the debt-ceiling debate rages on and some in the Senate Republican leadership seem ready to negotiate with big-government Democrats, the proverbial 4.2 trillion dollar gorilla in the room continues to grow while trampling over our economy and the formation of small businesses.
To be clear, there are two distinct paths:
We can go the route that President Obama favors, which includes an ever-increasing debt ceiling that will continue to crush economic activity.
Or, we can force government to “eat their peas” and use the force of law to handcuff legislators to policies that spur economic growth and job creation.
And the time to choose a path is today, before August 2, when the Federal government will officially run out of money to pay outstanding obligations.
According to Michael Tanner of CATO, the Treasury Department will collect roughly $203 billion in taxes during August, but have liabilities totaling more than $307 billion. You certainly could not run your family budget with this type of recklessness. And as America runs at lightning speed toward a Greek-like financial catastrophe, as our debt is on the verge of consuming our nation’s entire output.
Throughout American history, we have never failed to increase the debt ceiling. And as irresponsible politicians grow government for their own political gain, they have left us with a financial cancer that is metastasizing rapidly.
Therefore, conservatives must act boldly and proactively. Not only must we sit at the bargaining table and demand cuts, but there must be cuts in all levels of government which amount to an immediate reduction in the deficit. Anything less is unacceptable.
The second step is to use tough statuary caps that will tie the hands of future politicians from spending beyond the historical, pre-Bush average of 18% of the Gross Domestic Product. Politicians in both parties have proven themselves untrustworthy to reduce spending, so breaking that limitation would mandate simultaneous spending reductions.
And finally, we must have Congress approve the Hatch-Lee Balanced Budget Amendment, and send it to the states for ratification. Not only would it mirror most states which have their own requirements for expenditures equalling revenue, but it additionally requires a two-thirds supermajority to approve tax increases. And once the amendment is official, it would be quite impossible in the modern era to ever repeal it.
These proposals would have been impossible in any previous congress, including the 1994 Gingrich Revolution. But things have changed now that every man, woman, and child in the United States owes $46,000, and with our debt on a path to double within 10 years.
Thanks to Tea Party activists providing the necessary backlash to an ever-expanding federal government, the proposals put forth in the Cut, Cap, and Balance pledge are not only entirely possible, a majority of Americans understand they are necessary to put America on a path to new jobs and prosperity.
The Hon. Blackwell is the best-selling author of Resurgent: How Constitutional Conservatism Can Save America.