Tom W. Pauken
America faces its most serious economic crisis since the Great Depression. While the finance economy has improved somewhat since the bursting of the credit bubble in 2008, the labor market economy continues to languish with the national unemployment rate officially at 9.2 percent. The “solution” of the Obama administration has been a massive government stimulus program designed to get the consumer to spend us out of this nasty national recession. The president’s economic advisors claimed that its government stimulus program would result in unemployment coming down from 8.0 percent to 6.5 percent. Instead, unemployment is much higher today while our federal debt levels have risen significantly. Since the Obama stimulus plan began in February 2009 through May 2011, we have lost another 1.7 million jobs.
This Keynesian strategy of having the federal government spend its way out of this recession hasn’t worked, and it won’t work. As investment fund manager Mark Faber succinctly states, “The government continuously implemented policies to boost consumption when everyone should know that an economy will grow in a sustainable way through the implementation of policies that foster capital formation.”
This message is beginning to resonate across a broad range of opinion leaders. New York Times columnist David Leonhardt recently wrote a column entitled, “As a Nation, We’re Spent,” which notes that “the old consumer economy is gone and it doesn’t look as if it’s coming back.” Leonhardt points out: “We are living through a tremendous bust. It isn’t simply a housing bust. It’s a fizzling of the great consumer bubble that was decades in the making.”
The solution to our high levels of unemployment, lack of private sector job creation, and the hollowing out of our U.S. manufacturing base is to change the way we tax business in the United States. We have the most onerous corporate tax system in the world with a 35 percent income tax rate and a….