We are in a financial crisis. As I read various papers and listen to the debates on television, it appears that there are two possible ways to approach the situation. One, as espoused by President Barack Obama and other liberals ("Let them eat tax cuts," Sept. 12), is the Keynesian theory that the best way to get out of a recession is to dramatically increase government spending (more big infrastructure projects).
The theory is that this will put people to work and increase domestic spending and cure the recession. The problem is that the jobs are temporary, and if the economy doesn't kick in, the country has the same unemployment rate but with an increased national debt. In addition, the president proposes an extension of his payroll tax cuts. This will put a few more dollars in everybody's pocket, which we hope they will spend at the local mall. However, the payroll tax is for Medicare and Social Security. Aren't they both underfunded right now? This "modest" bill carries a price tag of $447 billion and pushes our deficit for 2012 to $1.9 trillion. The Sun has embraced this plan and even supports Mr. Obama's position that there is no other option. Anyone who opposes the bill is playing politics and doesn't care about the 14 million unemployed Americans.
At the risk of being un-American, I think The Sun should have great misgivings about this bill. First of all, the last stimulus bill was almost a $1 trillion and did nothing to reverse the unemployment rate or improve the economic outlook. Why would you think this one would work? What if it doesn't work? Can we run our deficit up to $1.9 trillion and suffer no repercussions? All of Europe is suffering from excessive debt. There is daily fear that one of the European countries will collapse and a domino effect will bring down the entire European economy. With a $15 trillion debt, we are fast catching up to Europe. Do we want to risk possible disaster without even considering alternatives? Apparently, The Sun thinks we should trust the White House and plunge ahead.
Why can't we consider alternate solutions that take little or no government money? The U.S. has the option of saying "no more government spending." We could bite the bullet and get our financial house in order.
How about this plan? We could reduce corporate taxes on any corporation who will manufacture their product in the U.S. Big corporations would be allowed to bring their foreign profits back to the U.S. tax-free — if they invest every penny of that money in a new manufacturing plant in America. The nation would immediately approve drilling permits for the Gulf of Mexico and the oil pipeline from Canada to the Gulf, and we could ask Mr. Obama to put aside politics and allow Boeing to build a new plant in South Carolina.
We could make a simple change to the tax code for all income levels (not just the rich) by limiting total deductions to 20 percent of your gross income from all sources. We could also require all taxpayers to pay something, even if it's just 2 percent so that we all share the pain. We could stop playing politics with our tax rates by always referring to them as the "Bush tax cuts" and make them permanent. If you want to raise taxes, pass legislation.
Oh, and since we all agree that this is the biggest crisis the country has faced since the Civil War, we could ask President Obama to cut his 2012 budget by 25 percent rather than wait 10 years. We could agree to let him make the cuts wherever he wants. It won't get us to a balanced budget, but it would show the country and the rest of the world we are serious.
Imagine the impact these things would have on the world business community.
Arthur D. O'Neil, Timonium