LEE’S SUMMIT, FEBRUARY 13, 2016 – This is the third in a four-part series that revisits an article I wrote in 2008, the first week of this blog. I put down my thoughts on how I was going to select the candidate I wanted to be President of the United States (click here). Eight Years later it is time to revisit the second of the four criteria.
- What is their fundamental belief in Government?
- What is their social view of Government?
- What is their fiscal view of Government?
- How will they react to a crisis and how will they leave the presidency at the end of their term?
WHAT IS THE CANDIDATES FISCAL VIEW OF GOVERNMENT?
The last president to leave a surplus in the treasury was Calvin Coolidge (August 2, 1923 – March 4, 1929) increasing the country’s wealth (or better said reducing previous debt) by $6 billion. That may not seem like much, but in today’s terms $6 Billion is over $83 Billion.
Herbert Hoover put us $ 5 Billion further in the in debt. Roosevelt with World War II put is deeper into debt by $196 Billion (the equivalent of $2.6 Trillion in today’s dollars). Harry Truman had surpluses in four of his eight years and left us only $3 Billion further in debt. President Eisenhower had a $16 Billion increase in the debt, Kennedy in his two budgets put us $11 Billion further in the hole.
In the 60’s deficits started to escalate. Lyndon Johnson’s War on Poverty left us with $42 billion in additional debt, Nixon $70 Billion, Ford $181 Billion, Carter 253 Billion. Fiscal concerns went out the window.
My favorite president, Ronald Reagan left us $1.4 trillion deeper in debt than when he took over the Presidency: Another huge escalation. George H.W. Bush added further with $1 Trillion.
Clinton reduced the debt by $63 billion. He had 4 years of surplus; sadly he raided Social Security to do some of what he did.
George W Bush added $3.3 Trillion to the debt (excluding the Obama Stimulus – in his last budget year that included Obama’s first few months in office).
President Obama has increased the debt by $6.6 Trillion. That is more than George W Bush, Bill Clinton (his surplus), George HW Bush, Ronald Reagan, Jimmy Carter, Gerald Ford, Richard Nixon, Lyndon Johnson, John Kennedy, Dwight Eisenhower, Harry Truman, Franklin Roosevelt, Herbert Hoover and Calvin Coolidge combined.
The United States of America is rapidly becoming the Greece of the world. If you thought the period when Greece was in trouble threw the markets into turmoil, then the United States of America will cause a complete revamp of the world’s economic system.
WHY IS FISCAL POLICY SO IMPORTANT?
The key question here is how much money the government will collect from the tax payers to pay for the government policies. The more money the government takes from the public to run itself, the less money there is out there for investment.
What makes the United States so different from all other countries and why is it so successful? The first thing is that the entrepreneurial spirit is supported from the early stages all the way through to fruition or to failure. The entrepreneur has the ability to protect an idea and with hard work capitalize the business, hire employees, make the product, sell the product and make money. That profit from the idea is then re-invested to grow the company and as it grows in employs more people who pay taxes and the country benefits.
However, if government puts new taxes on corporate profit such as higher income tax and then further tax capital gains then the money available to reinvest in the company goes down. If there’s less money to reinvest then the company has less money to hire new people, less money to react to opportunities in the market and it begins to choke off the potential benefit to the entire community.
The fiscal policy of a president will define how much money businesses will have to invest on growth. If we are in a recession at this point, even though the definition is not yet met, then the most important thing government has to do is to promote new jobs. The only way to encourage companies to invest in people and opportunities and to grow is to leave them as much money as possible for investment. When the company has money to invest in inventory and in people then more money enters the consumer markets and fosters more growth.
The opposite is also true. If we raise taxes then it chokes off the potential growth of small businesses, the true engine of our economy, and then they hire less people and that puts more people on the unemployment lines. People on the unemployment line tend to spend less simply because they have less to spend. If the consumer is pulled out of the market forces then there is less demand and that drives the recession deeper and deeper till you can’t tell the difference between a recession and a depression.
In 2008, even after the unprecedented increase in the Debt of the United States of America, we still had many more options than we have today in 2016 as we look for a new President.
Government spending has run amok. Health Care has put 1/6th of the economy under government control. The “assistance” payment to those who cannot pay for health insurance, and all the other government programs will have us at a debt of $25 Trillion or higher by the end of the next presidency – if we don’t elect the right person.
Select a president that has the right fiscal policy that will promote job growth and leave more money for the small businesses to fuel our exit from the recession. Any increase in taxes is bad, no matter what the reasons are. We are not in a REVENUE problem, we are in a EXPENSE problem and the next President will have to find a way to reduce expenditures.
The Lee’s Summit Conservative