Amanda Reinecker from the Heritage Foundation writes this about the federal fiscal mess — and it applies perfectly to our state mess as well:
Let’s get one thing straight: The dramatic increase in the federal deficit — which will rise to 8.3 percent of gross domestic product by 2020 — is exclusively the result of higher spending, not lower revenues…
All too often, the left argues that rising deficits are the result of too-low taxes, so we must therefore increase taxes to reduce the deficit. This is exactly the left’s argument today. But this is the wrong diagnosis.
Click here to continue reading her post. She refers to Heritage’s budget expert Brian Riedl who in a recent article “debunks several progressive distortions about the federal budget.” He provides a list of what needs to get accomplished:
“Successfully eliminating the deficit and balancing the budget requires drastic reforms…including…
- Reforming Medicaid and bringing long-term sustainability to Social Security and Medicare;
- Unwinding the bad policies in the health care law;
- Offering specific spending reforms, not just numerical targets;
- Avoiding tax increases; and
- Bringing transparency to the federal budget.
In his new book “To Save America,” Newt Gingrich writes that “Trickle-down bureaucracy does not create wealth.” He outlines a set of proposals to “reinvigorate the American economy and cut unemployment from 10 down to 3-4 percent.
“In addition to substantial spending cuts and a robust energy plan, [the proposal includes]”:
- Slash the corporate tax rate to 12.5%, matching Ireland;
- Abolish capital gains taxes to match China;
- Cut federal payroll taxes for two years followed by a permanent personal account option for younger workers;
- Abolish the death tax;
- Allow for 100 percent expensing of new equipment purchases by businesses, stimulating investment in new, productive technologies;
- Repeal the disastrous mark-to-market accounting that exacerbated the financial crisis;
- Break up Fannie Mae and Freddie Mac and move their successors back to the free market;
- Adopt a strong monetary policy, ensuring lower interest rates and more long-term capital investment.
It’s my view that a list of proposals like that for the Illinois economy would provide a jolt of energy into the Illinois GOP and make all the difference going into this all important November election.
This state’s economy can be revived — but it’s going to require an enormous over-haul of state government and state policy. Do our Republican candidates have the courage to propose real solutions based on specifics – not just lofty rhetoric? We’ll soon see.