I came to adulthood during the Jimmy Carter- Ronald Reagan presidencies and, though young and not greatly vested in our economy, I did realize how Carter's policies failed so dramatically, and subsequently lived through the golden era of Reganomics, some 25 years of prosperity. Now today we stand on the brink of a Carter-esque catastrophy again. What went wrong?
Clearly, we failed to learn from our past, and, in addition, we've elected people who either cannot do basic math, or choose not to. Instead, some politicians used some sort of convoluted math that defies logic to promote their own selfish agendas. Now I'm not speaking here as a Republican, or a Democrat, or even an Independent- I'm speaking strictly as a Fiscal Conservative.
I believe in many of those principles that Reagan promoted as a solution for our economic mess, especially that limited government is critical to economic growth. We won't find that today, for it would mean putting some of the 50 million people on the government payroll out of work and force some to find a real job. It would mean that some elected officials would actually have to do their jobs, instead of delegating everything to underlings. It would mean that, at some point, politicians would have to learn to work together again...
As to basic math, that our politicians don't seem to understand, it's simply this principal- 20% of a million is a lot more than 50% of a hundred thousand. Reagan understood this and slashed income taxes on the wealthy- from the 70% that Carter had assessed them to 28%. Now politicians screamed that we were allowing the rich to get richer and the poor middle class would be burdened unfairly. Sorry, but they were wrong, and history now proves it.
Under Carter, in 1979, the top 1% of Americans paid 18.3% of our total taxes (at a 70% rate). By 2006, at 28%, they were now paying 39.1%. In fact, the top ten percent of wealthy Americans paid 48.1% in 1979, but by 2006 they were 72.8%. One step further- the top 40% of all earners paid 85.1% of taxes in 1979 while in 2006 they paid 98.7%. Conversely, the bottom 40% in 1979 paaid 4.1% of all income taxes, while in 2006 they were receiving 3.3% in payments from the government. Why is this true, in direct opposition to the rhetoric were being force-fed today?
First, the premise that it takes money to make money is true. Consequently, those who have money will invest where they can make money. In 1979 it was not in America, where they lost more than 70 cents out of every dollar they earned. But under Reagan they got to keep about 70 cents out of every dollar, thereby making investing in America much more appealing. This created economic growth, which led to more jobs, increased spending, greater revenue streams for the government, lower interest rates, and lower unemployment. In all, a healthier economy.
Second, it is the wealthy that create jobs, which in turn creates income, which in turn leads to more taxes paid, which in turn leads to more revenue for our govenment. I have never one time, in all my 50+ years of life, ever seen or even heard of a poor man giving a rich man a job. Never, not even once. However, I know many rich men who give many, many more poorer men jobs. So it is in the best interest of our country to keep our wealthy investing in us, not someplace overseas...
Third, we've allowed what I call "Government Creep", or the slow (and sometimes not so slow) growth of the size of government over the years. Once government grows it fights the very people who elected them to keep what it's gained. It is like a snowball, rolling downhill, gaining size and momentum until it crashes and breaks. We need to stop it before it is entirely unmanagable and destroys itself and us with it... As Reagan believed, what we need to return to- limited government...
So to our current crop of politicians I say this- Grow up and work together. We're all Americans, we all want a healthy country. Learn to work together or get out. To Obama, and your obviously failed policies that are leading our country into fiscal ruin, look at our history, learn from our past. It's not too late to reverse yourself from your whole socialistic "share the wealth" philosophy and do something good for our nation.
The second, and perhaps most important step we need to do is to follow through. If you ask for advice let the person know you are willing to act on it. It is frustrating to be asked for advice, then feel like your words carried no weight, that your suggestions were just blown off... The result is often resentment, especially in our personal relationships where opening up and sharing often leads to being in a position of vulnerability.
