and for the long run
ERNEST F. HOLLINGS, former U. S. senator
2009 -- The United States has always paid for its wars. For 200 years
we paid for the Revolution, World War I, World War II, Korea, Vietnam,
even LBJ's Great Society, and had yet to reach a national debt of $1 trillion
- until 1982. Now our government in the past eight years has borrowed,
spent, and added to the national debt $5 trillion.
Budget Office reported that in the first four years of the Bush term deficits
were caused by: 48% tax cuts, 37% wars, and 15% increased spending. We
kept the government on steroids during the Bush years and household debt
of $7 trillion joined the binge. By the time Obama took office the Federal
Reserve had injected another $2 trillion steroids. With $14 trillion stimulation,
we were losing jobs like gangbusters. Stimulation was not working.
On my call
to replace Summers and Geithner, asked why, my answer is a question:
What have they done right?
yesterday's headlines "Four GIs killed in Afghanistan."
I hope I don't meet their relatives and be asked "What for?"
I'm at a loss for an answer. Even if you have the right answer,
whatever it is we have had the good try for over seven years. Enough!
Out! GIs are not expendable for politics.
we stimulated exactly $1 trillion, $35 billion, and lost jobs. According
to the Secretary of the Treasury, we have a deficit or stimulated the
economy $960 billion this fiscal year (3/16/09) and are still losing jobs.
Last night, Ben Bernanke on 60 Minutes said he saw light at the end of
the tunnel at the end of the year. So any more stimulation is politically
out of the question. So the government, like households, should hunker
down, stop spending where it can, and plug the hole of offshoring jobs
in the ship of state.
to act now and for the long haul is to dismiss Larry Summers and Timothy
Geithner to be replaced by Paul Volcker and Jared Bernstein. Plug the
hole of offshoring and raise revenues for the government we provide by:
a 10% value added tax to be effective the first of next year. It will
take the rest of this year for the Internal Revenue Service and business
to gear up for a VAT. But even in these lean times a 5% VAT would bring
in $700 billion; and once we start operating in the black, we can let
up on corporate and middle income taxes. The VAT is double-whammy. It
will not only help us pay our bills, but eliminate the 17% Chinese VAT
as an inducement to offshore to China.
the tax benefit to offshoring.
quota automobile imports. In the last eight years we've caused Detroit
a trillion dollar competition in foreign subsidized car imports. Bailouts
for GM and Chrysler will be wanting next year when cheap Chinese hybrids
start coming in.
The need to act now and for the long haul is to dismiss Larry
Summers and Timothy Geithner to be replaced by Paul Volcker and
Ernest F. Hollings
is nothing more than a trade war with production looking for a country
cheaper to produce. Globalization is not going away, but governments
have to compete. Economically, our government is at a "comparative
disadvantage" in international trade. We insist on industry providing
a high standard of living, but refuse to protect industry when it does.
We stupidly cry "free trade." If any in Washington thinks
China is going to engage in free trade, they need custodial care. At
present, we couldn't go to a real war if we wanted to because we would
have to wait for the troops' equipment to be imported. Activate the
Secretary of Commerce's list of those items critical to our national
security by exacting tariffs or quotas.
developing an industrial policy. We want to keep markets as open as
possible, but Chinese, Japanese and Korean competition in globalization
won't permit it. We can keep trying; but a measured industrial policy
will be necessary, using our country's production and rich market to
open world markets. At present, our production and rich market is in
disrepair, needing rebuilding. We have an industrial policy for domestic
commerce like anti-trust, provisions against price fixing, etc. But
we need an industrial policy for foreign commerce like agricultural
quotas. This will put America back to work and save our economy.
of South Carolina served 38 years in the United States Senate, and for
many years was Chairman of the Commerce, Space, Science & Transportation
Committee. He is the author of the newly published book,
Government Work (University of South Carolina Press, 2008).
Ernest F. Hollings. All rights reserved. Contact
us for republication permission.
Ernest F. Hollings served
the public for 56 years -- 38 years in the United States Senate and as South
Carolina's governor, lieutenant governor and a member of the S.C. House of
Today, Hollings continues
to be influential in public affairs and offers this Web site as a compendium
of current and past positions on public issues. Learn
more about Fritz Hollings.
Hollings receives French honor
France honored retired
U.S. Sen. Fritz Hollings on in 2013 by awarding him the Legion of Honor for
his World War II service. More.
commentary via The Huffington Post
Please visit Sen.
Hollings' section of The Huffington Post where you can get an RSS of his
columns, subscribe by email or use social media.
here to learn more about Hollings' impressive and distinguished record
of public service.
the new book
University of South Carolina Press in 2008 published Making
Government Work, a new book by Sen. Hollings. Learn