“As we go into an election year, I think really fixing problems gets politically harder,” said Nicholas Johnson, who tracks the conditions of states as vice president for state fiscal policy at the liberal-leaning Center on Budget and Policy Priorities. From Some States Are Facing Revenue Shortfall—Again… Published: Wednesday, 23 Nov 2011 by Reuters:
Alas, Mr. Johnson I’m afraid has it right…
The latest example of going-into-an-election-year politicking would be The Super Committee failure—efforts stemming from nothing more than a weighing of political risks. Ironically, a no win proposition for the party that was virtually powerless the first two years of the present administration. The Democrats facing recession-induced disaster, come November 2012, are masterfully exploiting the Republican’s Achilles heel; a slash spending/no new taxes, written-in-blood Bush(1)-style pledge.
“The “Party of No” wants to cut your social security, medicare, medicaid, food stamps, etc., all the while refusing to ask the fat cats to pay their fair share.” That’s the left’s battle cry. They’re thinking the populace will buy in and give them yet another round of change-making. We’ll see. It’s a long road to November.
I’m thinking the Republicans have a legitimate riposte. And, ironically, their best political maneuver would be in the best interest of the country. They must join with the ranks (not that they’ll be widely accepted mind you)—the occupiers, the victims, the “99%” – and move to end crony capitalism once and for all (realistically; once and for awhile). No more loopholes, no more subsidies or deductions for government-friendly (to the right or left) enterprises, and no more bailouts. They need to call it like it is. Admit that government screwed up the day it flinched first and performed its first bailout of a supposedly systemically important enterprise. Roll back all new regs imposed on the bailees, etc., over the past three years. That’s right, let them do business within the framework of pre-2008 regs. Knowing there’ll be no backstop, and no incentive to grease the politician, will inspire prudence and due diligence, I guarantee it. Then lower the corporate tax rate to 25% (even lower would be better). I don’t know whether that (no loopholes w/lower rates) will initially result in more or less taxes due, but I assure you, longer-term, the confidence that stems from tax and regulatory certainty will unleash capital in a huge way, create jobs and ultimately increase government revenue.
Idealistic, I know…