By Michael O’Derrick
As I sit listening to yet another news program depicting the fate of our economy, I realize that we have entered a new era of no compromise of significance from either party regardless of the consequences.
Is it true that we are in transition from governing from within to governing by abstaining from compromise? This seemingly new, but hardly tested, politics from Washington, presents the American people with no real voice in our financial debacle, leaving us feeling pulled in a direction downward with no bottom in sight. We as a nation have embarked on an experiment of democratic socialism designed around the antiquated economic model referred to as “Keynesian”. This model was partially effective during the depression of 1929, but mostly its success was due to putting people to work for the “Lend Lease Act” with England and, sequentially, the war effort here in the United States. At that time we were an industrialized nation, far different than the service-based economy of today. Gone are the manufacturing opportunities, as we can no longer compete with third world labor rates, and we also lack the necessary capital investment in infrastructure to increase our domestic output.
It is time to focus our attention on that one possible solution that will make a difference. “Infrastructure” programs, much like the “WPA” of the 1930’s, is a problem in need of upgrading across the country. Not since Dwight Eisenhower has there been a national infrastructure plan in the U.S. The reality of implementing a program of this magnitude requires compromise on both sides of the aisle. Where is the money to put in place an ambitious undertaking such as a “WPA” style of employment without raising taxes on corporate America and the small business man? The answer lies in the hands of congress to provide a tax holiday on corporate America since large balance sheets of un-taxed profits that have not been returned to the United States are currently estimated to exceed 1 trillion dollars. This could be used to fund the infrastructure programs on a localized state basis coupled with reduced corporate tax rates, i.e. 33% to 15% providing an additional trillion plus dollars in directed cash flow to state and local economies. The question is whether congress would act to implement a nonpartisan bill of this kind.
The answer is a resounding, No! Politicians juxtapose themselves for reelection without concern for the constituents they have been elected to represent, having lost sight of being elected to serve, not to be served. The argument has been made that if the tax holiday and corporate tax were reduced, the corporations would only add to their balance sheets without putting these savings back into employment. A safeguard can be put in place by applying a claw-back for those corporations receiving the reduced tax benefits. Failure to do so would result in the creation of a phantom tax liability to be enforced on a quarter-by-quarter basis.
In summation, the current administration has never understood the relationship between private enterprise, job creation, and the resulting increase in GDP. They believe that continuing to throw money at a stalled business cycle will change the cycle into an increase in GDP. When this theory was first tried we were an industrialized economy. Today as a service-based economy with little left to our manufacturing base, we must look for our economic driver to be “Infrastructure”.
It is is up to us to let our Congressmen know that we are fed up with business as usual. It is time for a change, one way or another.
