In my last blog I discussed Donald Trump's perspective on the economic problems facing our country. In this blog I present my solutions to the problems. If you don't agree, tell me why, but most of all let us all think seriously about our problems with the long-term goal of reclaiming America's greatness and recapturing the American dream.
First let's look at the numbers. The Congressional Budget Office has estimated that about 55 percent of our budget (some estimate 60%) goes to entitlement programs including social security; 20 percent to national defense; 8 percent to interest on the debt; and 18 percent is discretionary spending. My conservative friends may not like it but I'm suggesting solutions that target revenue growth but create true economic stimulation. I believe the implementation of my suggestions would improve the employment picture, enhance the stability of the social security system, and make Medicare more efficient and effective. Most of all it would enhance American confidence and the character of our nation.
We must act now to truly stimulate the economy. The argument that not raising taxes on the wealthy helps stimulate the economy by somehow creating jobs seems to be a hollow one at best. Even if tax cuts coincided with economic growth in the past, it was attributable more to a boom in the telecommunications industry (1990s) and not Clinton's economic policies. The boom collapsed in the early 2000s and was coupled with yet another round of business and financial fraud that were the forerunners of the current economic morass that we face.
Here are my suggestions for true change. First, raise the cap on social security taxes above the current base of $106,800. There is absolutely no reason to cut it off at that income level. Once you earn more than the base, it becomes a regressive tax. This change would bring in billions of dollars and be a permanent injection of needed and ethically justifiable funds that should be used to truly stimulate the economy. One way to do that is to provide a tax credit to businesses that hire and train American workers. I would say about one-half of the extra social security dollars should be used for that purpose.
Second, raise income tax rates on those making more than a million dollars. Right now tax rates top out at 35 percent once a taxpayer reaches $373,651 of taxable income. We should cap that tax rate at the $999,999 income level. Then, the tax rate should go up to 40 percent on millionaires and above. Let's face it, the millionaires can afford to pay higher taxes and it won't negatively affect job creation. Very few small business owners have taxable income (taxable, I remind you, not gross income) of $1 million or more. I mean, have you ever watched the real housewives of Beverly Hills, New York, or Miami? I think most millionaires can afford a bit less disposable money.
Third, get out of Iraq and the sooner, the better. Most of us know we never should have gone into Iraq in the first place. The irony of it is that Saddam Hussein, warts and all, was a foil to the Iranian regime. He was crazy enough that they feared what he might have done if provoked. Given the recent movement towards freedom in the Arab world, let's say to the Iraqis it's your turn now to take full control of your destiny just as the freedom fighters are doing in Egypt, Tunisia and Libya.
Finally, Congress should authorize the federal government to hire one of the big-Four public accounting firms to do an extensive audit of how the government spends money in all budget categories with the goal of cutting waste and fraud. The Government Accountability Office (GAO) is just not getting the job done. Past history tells us there are billions, probably trillions of true savings to be found. We have had enough of medicare fraud, corrupt government programs, and inefficient, nonproductive spending. It should be presumed that the audit recommendations will be followed, unless Congress can come up with convincing reasons not to do so, and that does not include bowing to political pressure. Congress needs to grow a backbone. Private businesses cut waste and inefficient programs all the time. They have operational audits that that save millions. In this regard Donald Trump may be the best man for the job.
More and more I hear and read about the hopelessness people feel about America's future. It reminds me of a Chinese proverb: It is better to light a candle than to curse the darkness.