The American Spectator : The Big Bamboozler

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The Big Bamboozler

By Peter Ferrara on 8.4.10 @ 6:08AM

Despite Obamanomics, here's how to fix the economy for all.

On Monday, at yet another campaign fundraiser, the part-time President, full-time campaigner Barack Obama told Democrat fat cats, with both hands in taxpayer pockets, that Republicans "have not come up with a single, solitary new idea to address the challenges of the American people."

But where are Barack Obama's new ideas? The Keynesian deficit spending of the 1970s, focused on the make-work jobs programs of the 1930s, is not exactly a new idea. Neither is socialized medicine. Neither is raising capital gains taxes, or restoring the death tax, or tripling the dividends tax rate, or raising the payroll tax. Taking us back to the failed economic policies of the 1970s, if not the disastrous economic policies of the 1930s, is not exactly bold new leadership for the future.

But Obama continued, saying that instead of offering new ideas, the Republicans are "betting on amnesia…. They're counting on that you all forgot… that it was the Republican policies of the last decade that got the nation into such a deep hole. They think they can run the okey doke on you. They are trying to bamboozle you."

But the all time champion of okey doke bamboozlement is Barack Obama himself, with his 2008 campaign theme that he would bring an era of post-partisanship to Washington. With no history of bipartisanship in his background, that phony, baloney campaign nonsense fooled a lot of gullible middle Americans into voting for him. Since he got the power of the Oval Office, however, it's been a virtually unbroken record of the most partisan extremism, like his quoted comments above.

When President Obama has supported something Republicans can vote for, like Afghan war funding, they have not hesitated to support him, and that Obama funding request passed only because of Republican votes. But that brief departure from the neo-Marxist party line has been almost as rare as a Chicago Cubs World Series appearance.

The Obama "Recovery": Way Too Little, Way Too Late

Obama continues to campaign as if his economic performance should be measured only from the last trough of the business cycle, apparently thinking he can put together a successful political coalition of the 51% dumbest Americans. But there isn't a majority of Americans dumb enough to fall for that statistical trick. The total of the continuing willfully gullible only adds up to something less than the 26% who tell Rasmussen they "strongly approve" of President Obama's performance. Most of those are liberals who affirmatively believe that the decline of America is a good thing for the world, and so it is logical that they approve of his performance.

But the "recovery" that Obamanomics has produced is way too little, way too late. As I have previously noted, while the average recession since World War II has been 10 months, and the longest previously has been 16 months, in June, 30 months after the start of the Bush/Obama recession, the economy was still losing jobs. Yet, the latest numbers show the "recovery," which has barely nudged unemployment below 10% only because so many have left the work force in hopelessness, is already losing steam. Growth declined from 5% in last year's fourth quarter, to 3.7% in this year's first quarter, to 2.4% in the second quarter. This is less than half the growth in the first three quarters of the Reagan recovery starting in late 1982. That recovery came after Reagan slew a historic inflation to boot, and continued on to become the longest in U.S. peacetime history. Indeed, it continued effectively for 25 years, a generation, with only two short, shallow recessions over that entire time.

That historic Reagan economic boom, moreover, ended not because of "Republican policies over the last decade," but, as previously discussed here, because of the eventual departure from every plank of Reaganomics, and the reembrace of Big Government liberalism instead. This was supported every step of the way by Obama himself.

How to Fix the Economy, For Real

As I discussed last week, we know, based on economic experience, theory, and logic, how to create another economic boom that will last 25 years, or a generation, into the future. Reagan showed us how. Why would we want to exchange what we know works, Reaganomics , for the opposite that has been proven to fail, Obamanomics?

Achieving a booming economy requires us to first adopt the tax code that will maximize long-term economic growth. That involves reducing tax rates as much as possible. Lower rates allow the productive to keep more of what they produce, which builds the incentives to engage in productive activities such as saving, investing, working, starting new businesses, expanding existing businesses, creating jobs, and taking on the risks and burdens of entrepreneurship. That results in more jobs and economic growth. Moreover, rate cuts affect the economy far more than through the amount of any tax cut. The lower rates affect every dollar and economic decision in America, including by those from elsewhere around the world.

If you understood that prior paragraph, you are smarter than President Obama, who has demonstrated repeatedly that he just cannot follow that logic. Indeed, he is out now arguing actually that lower tax rates cause recessions, a nutzoid proposition utterly devoid of economic logic. Maybe he knows that's nuts, but thinks he can fool enough voters with it, again. Either way, it shows how much deep trouble America is in as long as this man is anywhere near the White House.

Instead of rate cuts, what Obama has adopted, and keeps calling tax cuts, are tax credits, which provide a specific amount of reduction in taxes for those who qualify by jumping through government-designated hoops. If the credit is "refundable," then even for those who don't owe any income taxes, the government sends a check for the amount of the credit. Such credits do not change the fundamental economic incentives driving the economy. In terms of economic effects, they are no different from welfare checks, particularly when they are refundable.

To maximize economic growth, we need to first reduce the federal corporate tax rate of 35%, which, along with state corporate taxes, burdens America with virtually the highest corporate tax rates in the industrialized world. A federal rate of 15%, abolishing in return costly, unnecessary loopholes, would restore the international competitiveness of American businesses and employers. We should adopt a 15% flat tax as well, abolishing costly loopholes and deductions, including the slew of Obama credits. We should also maintain the 15% rate for capital gains and dividends. Another key is immediate expensing instead of extended depreciation deductions for capital investment in plant and equipment.

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About the Author

Peter Ferrara is Senior Fellow at the Carleson Center for Public Policy, Director of Entitlement and Budget Policy for the Heartland Institute, and General Counsel of the American Civil Rights Union. He served in the White House Office of Policy Development under President Reagan, and as Associate Deputy Attorney General of the United States under the first President Bush. He is the author of America’s Ticking Bankruptcy Bomb, now available from HarperCollins.

Letter to the Editor View all comments (59) | Leave a comment

TennesseeVolunteer| 8.4.10 @ 7:25AM

Peter, you are right in theory. But the elitists in Washington have conspired to give more than 50% of the people the gift of not having to pay taxes. Add the back door amnest if illegals and the tax pagers in America will be a minority of voters.
Your logic is good but the socialist elites will rule if allowed to proceed.
Stopping illegal immigration is where we have to make our last stand. Once the elites are stopped there, we can begin to work our way back to a free country, common sense, personal liberty etc.

paul| 8.4.10 @ 3:10PM

My friend, you have it wrong: 50% of the people may not pay income tax, but they pay MOUNTAINS of other taxes. Every time they buy food, gas up their car, use electricity or get on the Internet, they are being taxed. Every corporate and capital gains tax goes into the price of every product we buy; to say nothing of taxes on homes and real estate, which you either pay as part of your mortagage, or as part of your landlords mortgage when you pay him rent. Then we have that teensy weensy matter of payroll taxes for Social "Security", to say nothing of import duties that are in the price of every product we buy that comes from somewhere else.

The fact is, "we the people" are drowning in taxes. We may not always be completely aware of it, but a man knocked unconscious will still asphyxiate if he's held under water.

We need to wake the people up.
SLEEPER, AWAKEN!

TennesseeVolunteer| 8.5.10 @ 2:17AM

Paul, I don't disagree with you that we are all taxed in ways so insidious that we cannot even count them. But, the liberals have used the non payment of income tax as one of their main ways to control their voters. When over 50% of our voters don't pay income tax, they will worship at the liberal altar to keep their good deal. Be well.

wodiej| 8.6.10 @ 5:40PM

While they do pay some of the taxes you refer to, they pay no income tax. In addition they get back double on tax refunds what they paid into it. Many of these people are also using food stamps so they are actually not paying tax on that-they are using our tax dollars to buy food. Many of these people are also getting their utilities paid through city funds via taxpayers. Not all have the internet, many use the internet at the library for free and how do you know they all have a car?

So tell me again how many taxes they are paying compared to the rest of us?

blackknights1802| 8.4.10 @ 7:57AM

When Ronald Reagan was elected, the Feds were collecting $600,000,000.00 in revenue. When he left office they were taking in 1.2 trillion. He doubled revenue with an across the board tax cut. Which stimulated the economy. Which in turn increased jobs and production output. That wasn’t enough for Tip O’Neill and the rest of the progressives. No, they spent $1.25 for every dollar that they took in. The left, the socialists, the progressives or the liberals, whatever you want to call them, all they know is tax & spend. That’s my money, your money, and our money, not their money. They are pathetic.

vtwin| 8.4.10 @ 8:28AM

When Reagan took office the national debt was less than $1 trillion but would increase, primarily because of the massive tax cuts on the wealthiest Americans coupled with a massive increase in military spending, to over $3 trillion during his eight years in office.

Albert| 8.4.10 @ 10:57AM

Statistics do not equal knowledge. You really do not know what you are talking about. Reagan didn't bust the budget. Tip O'Neil did with social spending. You need to get past this "my guy is better than your guy" infantile nonsense. Grow up.

paul| 8.4.10 @ 3:21PM

Actually Albert, statitistics do not lie: the amount of money going into the treasury from federal income taxes DOUBLED during Reagan's time in office. They did precisely because tax rates were cut. Thats RATES, vtwin; not to be confused with revenues.

Why did a reduction in rates produce more revenue? Simple: because revenue is always on a curve. Think about it: if you tax people at a 0% rate, you get nothing. If you tax people at 100% rates, you will also get nothing, because no one is foolish enough to work just to hand it all over to the government. Revenue IS taken in between 0 and 100% of course, but if the amount begins at nothing and ends at nothing, then the line is curved, not straight. And if its curved, it means there's a top to it somewhere. That means logically that if you push rates past the top of that curve, you will get LESS revenue, not more.

All that Reagan (and John Kennedy) did was to realize that rates were counter-productively too high, and lowered them. Or, to put it in modern parlance, they lifted the governments boot off your neck (somewhat).

vtwin, you need to need to go and look at ALL the actual information which is out there, not just cherry pick your way to a an ideologically satisfying conclusion.

Albert| 8.4.10 @ 5:04PM

I agree completely. My point was that vtwin likes to throw out statistics without intelligent analysis or understanding, and then blame "the other guy" thinking his statistics prove his point. People like vtwin think the economy is a 'zero-sum game' and it's all about how to distribute the fixed amount of wealth. Reagan proved otherwise, as you indicated. A growing economy brings greater wealth to everyone, even government.

vtwin| 8.5.10 @ 1:10AM

"A growing economy brings greater wealth to everyone."

Really? 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

IzeHavitt| 8.8.10 @ 11:42PM

vtwin, the reason "66% of the income growth between 2001 and 2007 went to the top 1% of all Americans" is that, consistently, that top 1% makes it their business to be financially smarter than Joe and Judy Sixpack. Both Joe and Judy have the same opportunities to get financially savvy, but, human nature being what it is, instead of going to FREE (!!!) public libraries, or using the Internet, or buying the right books, they let themselves get talked out of it. Or, they're just too damned lazy to learn. Can't tell you how many times this observer has told a Joe or Judy about an interesting article in either the Wall Street Journal or Investor's Business Daily, only to be told "Aw, that stuff's for rich people, not me." Then their next stop is at the local c-store to buy a lottery ticket. They made a choice, just like the top 1%.

vtwin| 8.5.10 @ 12:43AM

"The most affluent 400 earners in 2007 -- who earned an average of more than $340 million dollars each that year -- paid only 17 percent of their income in tax, a lower rate than many middle class families," -- Treasury Secretary Timothy Geithner

"We live in one of the richest economies in the world, but one in eight Americans is on food stamps today." -- Treasury Secretary Timothy Geithner

Supply-side economics is destroying the middle class and indebting our nation.

Albert| 8.5.10 @ 10:49AM

You are an idiot. Supply side economics is really the only economics that works. Socialism can not even exist without a capitalist economy to steal from. The middle class is being destroyed by heavy taxation, government regulation, and artificial, government created markets such as Fannie Mae and Freddie Mac, e.g. Socialist policies. That many people live on food stamps is not reflective of supply side economics but of Democrat Party policy. It is INTENDED by Democrats that these people not only get on food stamps, but STAY on food stamps in perpetuity. The welfare state does not exist to help people in need. It exists to force people into government dependence in order to buy votes for Democrats. Furthermore, it did not start out as benevolent and get corrupted later on. It was designed from its inception as a vote buying scheme for Democrats, just as "Panem et Circenses" was a deliberate vote-buying policy of Roman Senators and Consuls 2,000 years ago. By the way, quoting Timothy Geithner is laughable.

Always Right| 8.5.10 @ 1:03PM

You aren't seriously using tax cheat Geintner as a reference? Maybe they paid less becasue , like him, they just didn't pay. But that's beside the point. Most high "income" people derive their "income"' from tax exempt investments. Further, they have the money to employ the the best legal and accounting people to work the maze that is the federal tax code. (Like john Kerry parking his yacht in RI and avoiding sales and use taxes, while telling us the "rich" don't pay their fair share.) And the have the money to lobby the elites in Congress to write tax laws that benefit them and thier friends, placing the real burden on the middle class. That is what destoys the middle class. And it is BOTH political parties that do it. Popwer corrupts, it always has.

"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on 'public assistance.'" Cicero - 55 BC

Gee, history repeating itself??? We need either a flat tax with NO exemptions as orignally existed, or the FAIR tax. But either way we have to CUT (read GUT ) spending.
"Societies fail to the extent they adopt socialist policies." - Ayn Rand

Bill Hussein O'Stalin| 8.4.10 @ 11:05AM

When Reagan left office in the debt was 2.7 trillion. He inherited a massive recession the tax cuts had little to do with the deficit. If the tax cuts had not been passed the deficit may have ballooned higher because the revenues also increased.

By the way the Obama deficit is 1.2 trillion in just his first 18 months.

The real point is that spending is not only out of control, it's not sustainable.

President Obama's spending will add 4.6 trillion to the debt from 2010 to 2016.

Will anyone stop the blame game and propose serious deficit reduction, i.e., a massive decrease in federal spending? Those who do end up on the road side of politics so few try.

Mimi| 8.4.10 @ 8:02AM

Thank you Peter: A brilliant article, with the best
of your knowledge, experience, skill, education and spirit. Obama, Should take your words..on this day as a rich " Happy Birthday "
gift! His drive the CAR explanations, going toward the abyss, on a long dusty dirt road, would hop onto a bran NEW super, 6 lane highway! Now back to the current, major question.... Is his direction for the nation purposful destruction or idiocy???

Irish22| 8.4.10 @ 4:06PM

The real question is: Why would Obama want to be ruler of a third world country, when he can be president of a first world country?

Blackwatch| 8.4.10 @ 7:28PM

revenge.

Albert| 8.5.10 @ 10:54AM

Lucifer said "It is better to rule in Hell than to serve in Heaven." A President is a servant of the people. A ruler of a third world country is just that, a RULER. A dictator. What drives President Bozo is the same thing that drove Caius Julius Caesar: ego. People like Bozo would rather rule with an iron fist over subjects who cheer him on and praise him for his "leadership", than preside over actual prosperity.

vtwin| 8.5.10 @ 1:35PM

“Revenge” Blackwatch, “rule with an iron fist” Albert, Bevis and But Head have nothing over you two!

Albert| 8.5.10 @ 6:45PM

Obviously, spell check is not enough for you. It should be "Butthead." "But" is a conjunction. "Butt" is a noun referring to your posterior.

Benjamin| 8.7.10 @ 3:14AM

Because Obama is steeped in radical leftist ideology that believes America is a racist, greedy, imperialistic nation that has achieved all it has by oppressing others. And so - he wants to "fundamentally transform" us into, uh, something totally different.

Rmm| 8.4.10 @ 8:09AM

Laying politics aside, it is beyond me why our fearless leader has an ounce of credence left in his bag of tricks. The fact that the doldrums we are in has gone on for 30 months is downright criminal.
Peter, perhaps you could get some face time with O and talk some sense into our idiot-in-chief.
I saw a quote recently that described Obama as " our best one-term president", Lord, I hope it is so.

Tim*| 8.4.10 @ 8:12AM

The Tea Party Rebellion Escalates .

The Contract from America

We, the citizens of the United States of America, call upon those seeking to represent us in public office to sign the Contract from America and by doing so commit to support each of its agenda items and advocate on behalf of individual liberty, limited government, and economic freedom.

1. Protect the Constitution
2. Reject Cap & Trade
3. Demand a Balanced Budget
4. Enact Fundamental Tax Reform
5. Restore Fiscal Responsibility & Constitutionally Limited Government
6. End Runaway Government Spending
7. Defund, Repeal, & Replace Government-run Health Care
8. Pass an ‘All-of-the-Above” Energy Policy
9. Stop the Pork
10. Stop the Tax Hikes

Real Tea Party Change In November .

Mark James| 8.4.10 @ 2:01PM

#1 above should read.... "Protect and FOLLOW the Constitution."

The idiots on the left think that because they interpret any way they damn well please they are actually "protecting" it. It's states things quite plainly, there really is not much interpretation required.

Always Right| 8.5.10 @ 1:08PM

The first one should be "Restore the Constitution". For instance, see Ann Coulter's article today re: anchor babies and the 14th Amendment.

Benjamin| 8.7.10 @ 3:25AM

But ... but ... I thought the Tea Party was only concerned about the color of the president's skin! /snark

Indiana Alex| 8.4.10 @ 8:23AM

Allowing individuals control and ownership of their payroll taxes would be the biggest wealth transfer in history from government to individuals, and would allow wealth to be transfered generationally for those that have nothing now but a government promise, revolkable at any time.

Of course this would also transfer power away from Washington, so congress would never go for it.

Doctor Right| 8.4.10 @ 8:23AM

Why bother explaining how to fix the economy as long as Obama is STILL in office??

Put simply, it ain't gonna' happen.

Paul Milenkovic| 8.4.10 @ 9:27AM

I know we simply cannot extend the Bush tax cuts on "the rich." But I thought that Candidate Obama campaigned on extending the Bush tax cuts to "those of (us) making less than $250,000/year, you will not see your taxes go up one dime."

Is this going to happen? Is anyone writing the legislation to prevent a broad-based tax increase on the non-rich? What is happening in Congress right now?

Ken (Old Texican)| 8.4.10 @ 9:40AM

Peter,
Once again, thank you. One thing you may have overlooked, or maybe did not stress enough..."business confidence and predictability".

There are probably better words to describe it, but the fact remains that this congress and this president have proven that they cannot be trusted to foster the tried and true mix you have outlined.

There cannot and will not be a recovery or boom until this congress and president are sent home in disgrace.
I am still wondering: what will be the catalyst that sends them home?
I second the motion of another commenter..."It's gonna' get ugly."

I just don't know what flavor of ugly...yet.

Louis Jenkins| 8.4.10 @ 8:26AM

A great article, but a bit too late. The problem was we let Obama get elected. Time to right the wrong that has been laid upon the people's back. Tim* I would lay one other item out for your edification: Stop Illegal Imigration now while we have the opportunity. If this mongstrosity of a dead fish is made law we're up the creek come what may.

Tim*| 8.4.10 @ 8:42AM

Louis , I believe that's covered in agenda item 1. Protect The Constitution .

U.S. Constitution: Article IV, Section 4
The United States shall guarantee to every State in this Union a Republican Form of Government, and shall protect each of them against Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened) against domestic Violence.

Louis Jenkins| 8.4.10 @ 8:58AM

I stand corrected Tim*. The problem is the degree of Invasion, and the immigrants do present just that.

Clinton nee Publius| 8.4.10 @ 9:39AM

When I read this article I was reminded of the analogy of two fleas arguing over which owned the dog upon which they were riding. The stated issue was how to fix the economy, but the prescription was how to try and patch over one particular symptom of a failed macroeconomic organizational structure of the free-market system, the failed central banking system, the failed commercial banking system, the failed capital market exchange system, the failed fiscal appropriations systems and the failed entitlement systems. All of these issues are interrelated and the resolution of the chief symptoms (e.g.: recessions, unemployment, deficits, national debt, government waste, etc.) of these failures requires a systemic solution and not one that monkeys with just one aspect.

During the Reagan era (and I was around for it) the national debt did not go down as a result of Mr. Reagan's policies, he wasn't able to reign in spending and he wasn't able to balance the budget and he wasn't able to end the problems we have with our banking and credit systems. What he did was good, but let us not forget that it served to shock the patient (the American economy) back to life and allow it to lurch on down the road, but now we are having heart attacks (recessions) on a much more frequent basis and each one could take us down.

The central issue is that taxation doesn't work as the means for financing government. It's a limited resource - you can only raise tax rates so far before the economy falters and actual receipts start going down. History completely sustains this premise as we saw with Wilson, Hoover, FDR, LBJ and Clinton.

We also know that the idea of reigning in government spending is the modern equivalent of searching for the Holy Grail and history has shown us that every single democracy fails because the liberal factions of the government have corrupted the process and voted themselves gifts from the treasury until the government and economy were bankrupted.

This is what we are actually facing and if we can't find a way to pay for government then we are doomed to the same outcome and that outcome appears to no longer be looming on the horizon, but is right in front of us.

Taxation cannot get there and the systems we have in place will never provide an end to the corruption, abuse, lack of accountability and lack of transparency - those can only come if we sober up and adopt a new system that can deliver these benefits and pay for all the government we want and that is the system promulgated under Lovellian economics (google it).

All of what they are saying sounds nice, but we are left in the position of believing a new arrangement of deck chairs will halt the sinking of our ship of state. I don't think it will work. It never has in the past, so what are the odds?

Richard2010| 8.4.10 @ 11:30AM

Great post. Plain, simple and accurate. Best part:

"We also know that the idea of reigning in government spending is the modern equivalent of searching for the Holy Grail and history has shown us that every single democracy fails because the liberal factions of the government have corrupted the process and voted themselves gifts from the treasury until the government and economy were bankrupted. "

aware| 8.4.10 @ 9:40AM

Wrong, wrong, wrong! Peter your Chicago School economics is fatally flawed. The key to REAL growth is to cut GOVERNMENT 80% and taxes 60%. Call it the Harding solution.

This proves again that monetarists are NOT free market advocates. Riddle me this, if your premise is true(lower tax rates equal higher tax revenues) then you are saying more money in government coffers is good????? More money means a bigger and bigger State.
Here is the flaw, monetarists accept the dominance of the State in the market. That is THE problem, not tax rates. The State, no matter how big, or "smart", or efficient can NEVER be a better substitute for the decisions of individuals.Central planning means misery for all under the planners power.

Are you naive enough to believe that "extra" revenue will be used to retire debt? It wasn't in Reagan's time was it? It never will be.
The key to economic growth is cutting government AND taxes.

Turnditch| 8.4.10 @ 9:49AM

As a fellow that scrapped by and survived James Earl Carter's disastrous and incompetent presidency and flourished during Ronald Reagan's eight year term, I wholeheartedly agree with Mr. Ferrara.

However, even with a GOP controlled congress, until the ex-community organizing Campaigner-in-Chief socialist is sent back to Chicago where he belongs, America will just linger in an economic stalemate.

George S| 8.4.10 @ 10:06AM

The economy is fine, nothing structurally wrong. Goods and services are still being produced, money still exchanging hands. The problem is no growth, no capital investment and that is due to uncertainty -- the inability of people to assess for future risks. Most of it stems from an Administration that is unpredictable and no one can tell what business will be absorbed, what czar will do what, and, most frightening... what rules will the White House make up next. In short: lawlessness, the government ignoring the Constitution and doing whatever it wants. So people are doing the only rational thing: protecting their wealth. All that capital being held back is doing two things. First, it is stagnating the economy. Second, it is stoking the fires of inflation. Both these together are working to drag down the economy and inflation will kick in when we start to recover as that flood of money starts chasing too few goods and investment opportunities. That is the double-barrel reason of the bad economy. The duration has to do with waiting out Obama; there's nothing structurally wrong.

Sorry to say, your solutions are just mere talking points. Lower taxes, less regulations, etc. etc. are not economic policies but social policies. Taxes and regulation come about at the urging FROM free marketeers, not the socialists. Most people pay lip service to free markets but in reality fear smarter competitors and hard work. That's why they petition government to tax and regulate their competitors out of business. Try opening up an automobile factory, an oil refinery or try to start an airline or import sugar and you will very quickly see the results of a hundred years of lobbying efforts meant to quash upstarts against entrenched economic interests. It's not the taxes and the regs, per se (people can work around those), but the fear of a lawless administration. Remove that, and the problem solves itself.

davelnaf| 8.4.10 @ 10:18AM

Starting this November, the damage Obama has done to the country will have to be reversed. This is an absolute given and Republicans had better know it is. The nagging fear most people have is that they might be persuaded to go along with what the dems have in mind for the near term, which is a VAT. Republicans might regard this alternative to rescinding Obama’s legacy far more politically palatable. But if they do they are on their way to the elephant graveyard.

Geoff| 8.4.10 @ 11:15AM

If what you say is true, then where the hell are the jobs? Where is the new investment? In the past 8 years there have been more tax cuts than in any other time in our history. Facts just don't back up your rhetoric.

Steve A| 8.4.10 @ 12:33PM

Geoff, If you spend WAY more than you take in & couple that with a moronic social justice housing initiative that blows up the real estate market, pure tax cuts will not solve the problem. Let's assume, for the sake of argument, that I make 250K per year. If you & I were in line at the gorcery checkout & I open my wallet to pay, would you reach in & grab a C note because I have more cash than you?? Probably not, but you will vote for the jackass who will do it for you every time because you are removed from the act but the net result is the same. You are a leech.

Mojo Risin| 8.4.10 @ 12:48PM

Look what happens when you turn the reigns of government over to an economic illiterate, just like the results Rhodesia (Zimbabwe) has been subjected to, thus America will be needlessly trying to extract itself from a self inflicted set-back that was easily predicted.

The second paragraph of this column is a primer on how to approach Obama in a debate with whoever: Paul Ryan, Gingrich, Romney, Palin. Jam the idiot, embarrass him in a televised public appearance, remind him that the failed policies of the Keynesian past and present WILL NOT WORK!!!

Jim O'Brien| 8.4.10 @ 12:56PM

There are two things which would result in unprecedented economic growth. First, enact the Fair Tax legislation which has been introduced in Congress (see www.fairtax.org). This completely eliminates the federal income tax system and the IRS, replacing necessary revenue with a simple national sales tax. No corporate or personal income taxes, no estate, capital gains, or dividend taxes, no tax issues about retirement, no tax returns or forms, etc.
Second, cut federal spending by about $2 trillion in the next 12 months.

Steve A| 8.4.10 @ 12:59PM

Jim O'Brien for Persident!

Steve A| 8.4.10 @ 1:00PM

Sorry, sp typo.

David March| 8.4.10 @ 1:36PM

Hmm…As an outsider I can say.

That until the recent downturn Canada, was retiring its debt at the rate of 10-20 billion a year. Any time there was a budget surplus it went into paying down the debt.

Though we have been running deficits for the first time in 15 years or so, business’s and people are pretty sure that when the government says we will be off of them in 4 years time, then we will be.

Corporate income tax rate is set to drop to 15 percent in 2012. Right now its set at 18 percent.

The highest personal Federal income tax rate is 29 percent for those making over 135000 a year.

Much of Mr. Ferraras proposal seemed very familiar to me. Since it pretty much is our proposals for getting out of the recession.

Oh do to stern regulation we didn’t have a housing collapse. Our banks did not leverage themselves out of business and are still making reasonable profits. We have a higher personal home-ownership than the US. We don’t have anything like Fannie Mae or Freddie.

Our spending by Government is 39 percent of GDP and has been at that level for over a decade.

Last month we added over 120000 new jobs and our unemployment rate has dropped down to 7.9 percent.

So everything can be done and actually works.

I would ask those that oppose Mr. Ferrara’s measures to point out to me a country where they have adopted our measures and failed?

dw| 8.4.10 @ 1:48PM

Just do everything Ferrara says in this article and there would be an economic boom like you have never seen before. It would also result in a decrease in welfare dependency because they would be forced to actually work for their benefits and then, as a result, decide that they might as well find employment in the booming private sector, which would have a place for them.
Realistic energy policy relying on private sector answers, as Ferrara outlined, would keep those related cost down thus resulting in sustaining the boom while in the meantime private sector R & D investment in synthetic energies would ultimately provide the best solutions and pave the way for a proper, efficient transition from conventional fuels to whatever becomes the best realistic alternative.
First we must defeat and reject the obamination and all of his leftist allies once and for all.

figusjanus| 8.4.10 @ 3:15PM

I think you have forgotten that the Board of Education should be removed or reformed to something other than what it is currently.

It is just a baby sitting service now a days. A place for the far left to indoctrinate new disciples of the Marxist regime.

Oldefarte| 8.4.10 @ 4:05PM

I agree with most, but not all, of Peter's thesis; in that he ignored [IMO] the need to outlaw labor unions, to substantially reduce all government expendatures, and to retool the public education system. Unions create an inflated [over market] wage rate which is economically counter-productive and unnecessary. While tax reduction is always beneficial and necessary, our current extreme governmental budgetary deficits and debt necessitates the initial financial solutions being to seriously eliminate and reduce governmental spending at all levels [which will accompolish much of what Peter emphasizes concerning tax reductions] in order to jumpstart our economy. Finally, unions should be eliminated from public education, causing an elimination of incompetitent teachers and administrators [that are all on the public payroll because of teacher unions efforts] and a graduated improvement of learning by children/students and their corresponding test scores!!!!!!!!!!!

Proud Mormon| 8.4.10 @ 7:34PM

Mitt can fix our econonic problems. Romney for President!

Mormon Girl| 8.4.10 @ 7:36PM

Second the motion!

blackwatch| 8.4.10 @ 7:44PM

Olde Farte, I like your ideas.

Let's start with a no-brainer: sell of the USPS or atleast turn it over to a competant business to run it. Eliminate Saturday mail delivery, eliminate parcel delivery--Fedex kicks their ass. Sell of as many of the 36,000 post offices in America and open satellite branches inside walmart, lowes, kroger, etc. Use non-union employees as much as possible. Create a reason for direct mail advertisers to bring business back to the USPS--cut the ever spiraling cost of direct mail and watch businesses resume with marketing offers.

Justdoit| 8.5.10 @ 10:51AM

a fixall,pass fairtax,then change the 5,10,20,50 and 100 dollar bills. Give everone ,after the fairtax is passed 18 months to either spend their old dollars here in the good old U>S>A or exchange them for the new bills. If spent here no questions asked. If one tries to exchange for new then one has to prove legal gain of the old. The boom to the U>S. would be great. To many ups for the U.S. to list here. THINK ABOUT IT>

M. Btok| 8.5.10 @ 1:04PM

The reasons why, we must vote out, Establishment Government Representatives, whether they are Left or Right - Incumbent or Candidate!

Make sure they do not belong to any of the Global Elitist Organizations: Bilderberg Group, Trilateral Commission, Council on Foreign Relations, Club of Rome, Skull and Bones, Canadian Council of Chief Executives,
Harvard Elite Players, Goldman Sachs, International Monetary Fund, The United Nations, World Health Organization, World Trade Organization.

The reason we must vote out Establishment Government Representatives whether they are Left or Right, Incumbent or Candidate is explained on this 2 minute News Clip below:

TWO Party Paradyne System News clip:
http://www.metacafe.com/watch/.....ra_part_2/

Re: Americans' who wish to stop the thieving and robbing, of your income and resources in your country, by the Globalist Banksters need to, "End the Fed"!

The grocery store, along with your kitchen sink, are two of the most dangerous places in the world.
In a special video, Alex Jones addresses one of the darkest modes of power the globalists have used to control the population– food. The adulteration of the planet’s staple crops, genetically-altered species and intentionally-altered water, food and air all amount to a Eugenics operation to weaken the masses and achieve full spectrum domination.
People the world over, but especially in the United States are under chemical attack. Deadly and dangerous toxins ranging from Aspartame to Fluoride, GMO, Mercury-tainting, pesticides, cross-species chimeras, plastic compounds in chicken, high fructose corn syrup, cloned meat, rBGH and new aggressive GM species of salmon have all entered into our diets and environments– whether we want it or not.
Many of these substances knowingly cause or are linked with sterility, low birth weight, miscarriages, smaller or deformed offspring, as well as organ failure, cancer, brain tumors and Death itself, what you DON’T know about on your grocery shelves can hurt you. Further, Alex demonstrates that a pattern of buried studies, fraudulent statistics and a will reduce global population all point to the deliberate criminal poisoning of the food and water supply.
Suffer no fools if those you show refuse to believe what is going on. Instead, research these important areas for yourself, and warn those you love about need to stop their food from being used as a Depopulation-weapon against us all. Please share this important video with everyone, so the truth about these substances can be known.
Check out the eye opening News Clips: http://www.infowars.com/food-t.....t-exposed/

Jack Kinch(1uncle)| 8.5.10 @ 1:09PM

Cut taxes? Cut size of government. Eliminate Departments of Education, Labor, Agriculture, Commerce and Transportation. Cut congress and their staffs in half. Have Romney go through government cutting and eliminating. Vote on each earmark separately. Stop breeding demos on welfare. Big savings in crime and welfare over time. NO more immigrants. Check recent news about Somalians some idiot allowed into the country.

David| 8.5.10 @ 3:24PM

Mr. Ferrera, I don't have a problem helping out people when they are down, but you disappoint most actual fed income tax payers when you suggest continuing the Earned Income Tax Credit.

And you aren't about your 15% tax across the board. Do you mean everyone, including low income earners, will have to pay 15%?

It is one thing to give food stamps, housing and healthcare assistance, vouchers for education, etc., and it is quite another (in my opinion, immoral and on the verge of criminal) to simply send a check worth thousands to people who currently pay zero fed income taxes.

Lawmakers should not have the right, and you should not suggest, that anyone has a right to take actual taxpayers money and give it to the less well-off. They can work a full time and part-time job. They can cut back on their cell phones, cable television, Internet access, fashionable clothes, etc.

If it were not for the EITC I could probably be in the 20% tax bracket instead of 25%. I want to keep my own flippin' money and you want to hand millions of people thousands of dollars to spend on whatever they want when they are already getting all other kinds of targeted assistance.

David| 8.5.10 @ 3:25PM

Mr. Ferrera, I forgot to direct you to read some the reporting that Robert Rector has done. He can set you straight as to the tremendous amount of assistance that the bottom 30% of income earners receive. It's enough to make a taxpayer scream.