Wednesday, November 03, 2010
And Now Bayh
This is an op-ed in the NY Times by Evan Bayh, who has had a long Democratic career. One notable difference between Bayh and many other congressional politicians is that he was governor of Indiana for two terms. Few state governors can escape a more focused perspective on fiscal problems.
Keep in mind the polling - voters are not fond of the GOP, for obvious reasons. Many of Bayh's suggestions sound very similar to TEA party rallies:
An electorate that is 76 percent moderate to conservative was not crying out for a move to the left.Of course he ends with a whack at the TEA party as being extreme, but this is mostly stuff the average TEA partier would support. If this election produces a Democratic party competing with a Republican party to figure out how to improve our fiscal and economic position, it will end up being a win for the voters, at least.
We also overreached by focusing on health care rather than job creation during a severe recession. It was a noble aspiration, but $1 trillion in new spending and a major entitlement expansion are best attempted when the Treasury is flush and the economy strong, hardly our situation today.
So, in the near term, every policy must be viewed through a single prism: does it help the economy grow?
A good place to start would be tax reform. Get rates down to make American businesses globally competitive. Reward savings and investment. Simplify the code to reduce compliance costs and broaden the base.
Democrats should support a freeze on federal hiring and pay increases. Government isn’t a privileged class and cannot be immune to the times.
The most important area for spending restraint is entitlement reform. Democrats should offer changes to the system that would save hundreds of billions of dollars while preserving the safety net for our neediest.
Before the election Obama was taking positions that sounded very similar to Republican-type economic prescriptions.
I think the emergence of the TEA party has changed the political landscape. Whichever party caters to its inner moderate accountant will end up being the winner in the long term.
The solution is two pronged.
1. Hold the line on spending to the 2008 level.
2. Reduce corporate taxes to 10-15, promote oil and gas drilling in ANWR and everywhere offshore, encourage builring nuclear power plants, institute real financial reform, adopt a generally more pro-business attittude in Congress and the White House.
Holding spending down while getting the economy moving again, would start bending the debt curve down. We can only work our way out of the debt by increasing the wealth of the country. Only the private sector creates wealth. Everything the government does should be aimed at getting out of the way of the wealth creators.
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