By Attorney Jonathan Emord
February 20, 2012
NewsWithViews.com
When the economy is in the doldrums, those on the lowest rung of the economic ladder suffer the most. Their solution is not a promise of government programs to train a small subset of them or employ an even smaller subset in temporary make-work jobs. Those “solutions” provide momentary relief only to a fraction of the poor who participate in the government programs, only as dictated by government planners, and only for so long as the federal funds keep flowing. The solution, rather, is an immediate alteration in the relationship between government and the private sector to permit the private sector to grow freely, without federal direction, constraints, or tax burdens and draw down the ranks of the unemployed to meet the demands of the market. The means to achieve that immediate alteration are to reduce substantially the size and scope of the federal government, cut taxes on business, and eliminate the personal income tax.
President Obama is possessed of that same unfounded confidence which feeds the minds of all intoxicated with elective office who subscribe to the view that government planning can achieve for the market greater results than the market can achieve for itself. Rather than give back to the productive the money the federal government takes from them so that they may expend their resources as they think fit and employ people with the skill sets they need, the President proposes to raise taxes by over $1 trillion and create a series of new federal initiatives (transportation infrastructure, education, school modernization, new teacher hires, and a whopping $8 billion federal job training program), all designed to placate temporarily a subset of those he must convince to re-elect him (including, for example, the unemployed, parents struggling with student loans, and public employees fearing or experiencing job cuts). With the varnish removed, Obama’s government planning initiatives are drawn from the same moribund concept that proved Joseph Stalin, Mao Zedong, and Pol Pot utter failures. One of the most commonly confirmed historical verities is that government planned economies fail and fail miserably. Government cannot predict the outcome of ever fluctuating demand for goods, services, or labor. While Obama intends to spend billions on job training initiatives, neither government nor academia can predict the precise skill sets that industry will need next year, let alone over the next decade. Rather, industry itself, if freed from government constraints and heavy tax burdens, can finance its own education initiatives geared precisely to satisfy each company’s immediate needs.
From Obama’s rhetoric, one would think that there is a dislocation between industry and education when, in fact, any such effects are temporary and market driven. If companies pay enough for qualified talent, students will acquire the education necessary to satisfy that demand. If there is a shortage of certain skilled laborers, employers will pay more to get them, and those entering school will take the courses needed to reap the financial benefits. Some large companies would rather have the government subsidize the cost of labor and, so, Obama’s $8 billion fund will be but another political gambit indicative of the crony capitalism he so frequently embraces.
Portraying himself as the representative of the downtrodden, President Obama’s budget is, in fact, a kiss of death for the poor. It offers them no solution to poverty. Instead, it offers them a deceptive token, a false promise from that somehow the billions he will pump into government programs will translate into a meaningful change in the state of poverty in America. His is a promise of a better day that is very long on promise and very short on the kind of fundamental reform in the relationship between government and the private sector necessary to permit private sector growth and job creation. What the poor need is not a pledge of a subsidy for attendance at a community college (read a few books while you starve) or a temporary state funded construction job (earn enough to survive the summer). What the poor need is precisely the same as what all Americans need: a vibrant private sector in which opportunity abounds and the chance to prove oneself exists at every turn. That comes only if a government that maintains debt in excess of the gross domestic product shrinks to the limits of its tax revenues and removes every obstacle to free enterprise that government has put in the way—from regulation to taxation.
Government is a parasite. It cannot create wealth nor determine how wealth is to be created by the productive. The productive must be set free. They will then do what they have done historically and so well, satisfy demand, build empires, and produce an upwardly mobile economy in which the poor, and indeed all of us, have opportunities to succeed. We reached record low levels of unemployment a decade ago not because of government programs but because of a vibrant private sector, infused with brilliant contributions from the likes of Bill Gates and Steve Jobs.
The President’s budget proposal, Dead On Arrival in the Republican House and one that is in fact his 2012 campaign platform, calls on government to reduce the present $1.33 trillion dollar deficit by a paltry $400 billion in each of the next ten years, bringing present spending to an unacceptably high deficit of $901 billion by 2013 and failing to achieve a balanced budget at any point in the foreseeable future.
At a time when regulatory and tax relief for all, the rich and the poor, is essential to jump start the economy by leaving in private hands the power to decide for oneself how to invest, spend, and produce, the President wants to draw even more private wealth into the government by ending the Bush era tax cuts, eliminating tax deductions for the wealthy, requiring those who earn a million dollars or more to pay 30 percent of their income in taxes, imposing $61 billion in new taxes on banks, and ending tax breaks for oil, gas, and coal companies (thereby increasing taxes on those industries by $41 billion annually).
Private concentrations of wealth are essential for job creation, for creating self-sustaining employment. Vast stores of money, whether invested or expended, create opportunities for employment that satisfies market demand. By contrast, government programs to train, make work, or publicly employ are dead end investments. They require a draw on private wealth to pay for them and they cannot be continued without continuous additional draws on private wealth in future. In short, they add to the debt, reduce capital available for private growth, and increase public dependence on government.
When we take into account the federal financial obligations coming from the Patient Protection and Affordable Care Act in 2014 and beyond, the President’s planned spending overwhelms the paltry $400 billion in annual cost reductions his plan offers. Consequently, he is digging the debt hole much much deeper, inviting a collapse of the economy and of the government itself.
The bankrupt ideas of the President are a microcosm of the actual bankruptcy implementation of them would bring to the United States. His re-election depends on an assumption that the American people are too ignorant to comprehend the sleight of hand inherent in his proposals or the essential need for substantial reductions in federal spending. The American people, however, are increasingly cognizant of the fact that this President has no real solutions to the problems befalling the country. They increasingly recognize soberly that the debt crisis is dire and promises to bring down this great nation in less than a decade. Whatever inflated credit that may mistakenly be given to President Obama (rather than to Seal Team Six) for Obama’s decision to allow U.S. special forces to take out Osama bin Laden is trifling in comparison to the monumental blame he will richly deserve if his irresponsible fiscal policies are adopted and bring about the destruction of the United States economy and, indeed, the government itself.
© 2012 Jonathan W. Emord - All Rights Reserved
jb
“The government of the United States is a definite government, confined to specified objects. It is not like state governments, whose powers are more general. Charity is no part of the legislative duty of the government.” -- James Madison, speech in the House of Representatives, January 10, 1794 [boldface added].
