By Kevin Price
The United States is in an economic crisis, one that is being compared to the Great Depression. The days of comparing our economy to the Carter years seems long behind us as we begin to see "Obamavilles" pop up around the country.
The administration and its allies in the last Congress could not have been more destructive on our economy, even if that was their actual intentions. In the first two years of Obama's "change" we have seen massive subsidies benefiting the richest corporations in America passed first by Bush in the fall of 2008 and part 2 (worse still) in January of 2009. It was interesting that the very liberal and very conservative Members of Congress voted against these bills. The left clearly saw the corporate welfare involved and the right saw both that and the obvious disregard of the Constitution. We were told that action was needed "now!" If not, we were looking at unemployment of around 8.5 percent by 2009. We have that unemployment rate and more with the "stimulus" and the situation is only getting worse.
There are several serious challenges facing Americans today:
· The highest unemployment rate in recent history. Forget about the 8.5 percent touted by the Obama Administration, economists on both the right and left say it is much more. Bill Clinton's former Secretary of Labor and a huge fan of Obama, Robert Reich, says the actual unemployment is closer to 15 percent. In many cities it is higher still.
· Excessive taxation of the job creators. The vast majority of jobs comes from people who make $250,000 a year or more, yet this group is being singled out to pay more taxes as a form of economic genocide. It has never been easier to move capital and with US tax rates the second highest among industrial countries in the world, you can expect a flight of capital and jobs that comes with such. By 2011, when the Bush tax cuts expires, the US will likely have the highest tax rates in the industrialized world.
· Hyperinflation. On one day, the federal government pumped $1.4 trillion in the money supply in order to pay some of its recent bills and to "jump start" the economy. This type of policy leads to hyperinflation as too much money chases too few goods. The Federal Reserve has decided to make inflation an overt policy -- pumping more "funny money" into the economy to force us to consume more. The last time the US took this approach was in the 1930s and that let to the doubling of unemployment.Obama should approach our situation with these realities in mind. His policies should focus on results and not intentions.
· Remove the barriers between people and jobs. This isn't through temporary government jobs that will run out with the subsidies, but through real jobs that create revenue for them to grow in number and in quality. The federal government should mandate the states to have a minimum wage law in each state of the union and allow them to set them based on the needs of the people in those states. This would not cost the federal government a penny, but would spur economic activity immediately.
· Discontinue taxes on corporations because they do not pay taxes, they are only tax collectors. Taxes are simply a fixed cost for doing business. If taxes are too high, businesses have no choice, but move to places where the rate is less so they can lower prices and be competitive. This would have a profound impact on high quality job creation. This policy would also encourage an increase in productivity, which will help to curtail inflation.
· They should end taxes on wealth creation entirely and replace income tax with a sales tax. This would eliminate the economic genocide against job creators and would more fairly spread the financial burden of government on all economic groups which would also increase voter accountability.
America is in serious trouble and the current administration needs to acknowledge that by taking the type of drastic actions presented in this article. Hopefully, the new Congress will be the first step in moving in the right direction.
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Kevin Price
Host, Price of Business, M-F at 11 am on CBS Radio News
Frequently found on Strategy Room at FoxNews.com
Syndicated columnist whose articles appear on a variety of media outlets.
His http://BizPlusBlog.com/ is ranked in the top 1 percent of all blogs by Technorati.
Kevin Price's Profile: http://www.google.com/profiles/PriceofBusiness
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