Hope and change were the magic words that swept a relatively unknown, inexperienced Barack Obama into the Oval Office. He campaigned as the one able to fix the Bush economy. Once in office, he has protested that he didn’t know how bad the economy was even though that was what he had run his campaign on. He has spent the majority of his first term blaming everyone for everything. His signature accomplishments, the stimulus, Obamacare and the Dodd-Frank financial reform have done more to hurt than help. Serial vacations and weekly golf outings aside, President Obama has worked hard and has so far managed to turn a recession into the Great Recession. Now he offers the opening salvo of his 2012 campaign economic platform and the message is, “More of the same” with no solution in sight.
The solution to our current malaise is not more of the same. It isn’t spreading the wealth around in a step-by-step slide into socialism. The solution isn’t even a return to the status quo as it stood before the current administration began its war on American exceptionalism. We cannot return to a system that alternates between Republican and Democratic Progressives. We must make a break with the post-Reagan past. We must return to the fundamentals that made America the greatest nation the world has ever known: individual liberty and free enterprise safe guarded by a written constitution, and a federal representative republic operating on democratic principles
The solution is simple. How we get there is the subject of this article and hopefully a sign pointing in the direction of change.
Currently, a tax system no one, even the people who write it, can understand depresses creativity and entrepreneurship by penalizing anyone who excels with the aptly named progressive tax. Income tax had been declared unconstitutional by the Supreme Court in 1894. So Congress led the way in proposing and passing the 16th Amendment which allowed for not only an income tax but a graduated income tax. The first income tax law provided for a graduated tax with a top rate of 7%. And when it was stated during the debate that someday the rate might reach an unbelievable 50%, the speaker was laughed to scorn. Yet by 1961 the top rate had climbed to 91% with the 50% rate beginning at the $16,000 level. These rates were cut dramatically under Ronald Reagan and a wave of growth was ignited that blazed for decades. However, they have been creeping back up ever since. But it isn’t the rates whatever they are that we should stand against. It is instead the idea behind them. If we want a level playing field and if we want everyone to pay their fair share what we need is a flat tax. Everyone, whether they make $1,000, $10,000 or $10,000,000 pays the same percentage with no deductions and no tax credits. Everyone pays. Everyone contributes. If you earn money you join with all other earners to support the nation. Trying to tax our way out of debt elicits a paraphrase of Parkinson’s Law, “Expenditures always rise to meet income.”
Next we have to unleash our corporations.
Today, America has the highest corporate tax rate in the world. This makes us uncompetitive and unattractive to foreign capital. First of all, tax on corporate profits is a double tax because corporations are owned by stock holders. When the profits are distributed to the owners of the stock, they are responsible for this as income. Therefore the corporate tax is a double tax which is obviously unfair and an inhibition to growth and productivity. I do not propose to lower the corporate tax rate. I propose we eliminate it entirely. This would strike a blow for true equality, freedom, and fairness. It would also take a giant step in the direction of making America once again the most attractive place in the world for those who want the freedom to excel.
I would couple this with an immediate moratorium on federal regulations and a roll back on those which have shackled our economy since the beginning of the progressive era. Take the oil industry for example. If we would cut the ideologically driven threads which bind this giant, we could unleash the power of our vast reserves, free ourselves from dependence on our enemies and create millions of jobs. “Drill Baby Drill” could become the slogan for a general renewal of American free enterprise. We need to cut the red tape that strangles us and let freedom ring.
What about foreign Affairs?
Internationally we need to return to the policies which guided us from being a raw undeveloped nation on the edge of civilization to the pinnacle of world power. This foreign policy is superbly summed up by one of the most under-rated presidents in American History, John Quincy Adams in his statement, “America goes not abroad, in search of monsters to destroy. She is the well-wisher to the freedom and independence of all. She is the champion and vindicator only of her own.” To return to America’s traditional foreign policy we need to end the undeclared wars. Stop maintaining garrisons in more than 100 nations around the world, bring our troops home, and guard our own borders. We need to quit trying to build nations for people who don’t even like us, come home and rebuild our own infrastructure once the envy of the world now a crumbling reminder of what we could once accomplish.
We also need to return the control of America’s money to Congress where it belongs according to the Constitution. The perpetually re-elected have abdicated their responsibility to create money to the Federal Reserve. Originally instituted to abolish the business cycle and manage the economy, this central bank has presided over the devaluation of American currency and the inflation of one bubble after another which has led to one crash after another.
It is instructive to remember, that Marx in his Manifesto of the Communist Party called for, “Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.” And that Thomas Jefferson said, “The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.” We must free ourselves from this privately and secretly owned corporation that controls our monetary system and our economy.
Lenin once said, “The surest way to destroy a nation is to debauch its currency.” The Federal Reserve Bank has inflated our currency almost beyond recognition and to re-establish our nation as the greatest experiment in human freedom that it was meant be we must reverse this trend. To do this, we must stop the deficit spending which drives our debt which creates the need for politicians to inflate our currency to hide their mismanagement. We need to cut current deficit spending, cap future spending, and begin to pay down the debt. Only by actually becoming responsible once again will we create the certainty of value that sound money portrays. Inflation is a dishonest tax upon all we earn and the silent thief of all we save.
Our current leaders work to manage the decline of America. However, those of us who refuse to accept the inevitability of this decline can turn it around. We can stand in the gap and bring forth the re-birth of America. So, if we have the will and the courage we can have some real hope for a change.
Dr. Robert R. Owens teaches history, political science, religion, and leadership for Southside Virginia Community College. Dr. Owens is the author of “America Won the Vietnam War,” “The Asuza Street Revival,” and called “The Constitution Failed.” He is available for speaking engagements.