SEPT. 16, 2015 -- The United States paid for all its wars, depressions, recessions, etc. and it took over two hundred years to incur a national debt of $1 trillion in 1981. President Reagan increased the debt $1 trillion in eight years. President Bush increased the debt $5 trillion in eight years. President Obama has increased the debt $7 trillion in six years. Instead of paying for government, the U.S. will borrow $468 billion at the end of September. Grover Norquist's pledge against taxes is a luxury we can't afford.
In 1993, Democrats cut spending $250 billion; increased taxes $250 billion without a Republican vote in the House or Senate. This with Telecommunications and Welfare Reform gave President Bush a balanced budget in 2001. But Bush cut taxes, started wars, added prescription drugs to Medicare, stimulated and bailed out - all without paying for them. I introduced a tax to pay for the Iraq War but President Bush opposed it. Instead of paying for government, Democrats said: "Republicans didn't help pay for government in 1993. We're not paying for Republican spending now." G.I.'s will not only fight the wars but will have to come home and pay for the wars. No sacrifice at home.
Republicans will only cut spending to pay for government. Now that Republicans are in charge of both Houses of Congress, there is no effort to pay for government. The Budget Authority for Defense (050 BA) in 2000 was $304 billion and in 2015, $560 billion. If Defense increases each year for fifteen years, plus the cost of the Afghanistan and Iraq Wars, prescription drugs, stimulations and bailouts, Republicans would have to cut trillions in spending to get back to the balanced budget of 2001. Unrealistic!
Moreover, Corporate America joined in the effort for years to protect industry from closed markets and predatory practices. President Johnson blocked a bill in 1968 and when the textile bill passed both houses, President Carter vetoed one, President Reagan vetoed two and President George H.W. Bush vetoed one. When President Clinton went for NAFTA with Mexico, WTO and "most favored nation" trade status for China, Corporate America said: "If you can't beat 'em, join 'em." Offshoring exploded. Between 2000 and 2010, the U.S. lost more than 60,000 manufacturing plants (Mulloy: "U.S. Opportunities and Challenges in the Asia Pacific" 2/26/15). Ford recently announced a $2.5 billion plant in Mexico, GM a $5 billion plant in Mexico and Nabisco is moving from Chicago to Mexico. Offshoring continues.
The U.S. doesn't want to reduce its safety, health and environmental provisions and yet it has to make it profitable for Corporate America to rebuild our U.S. economy. The President and Congress can make it profitable to produce in the U.S. by cutting taxes - replace the 35 percent Corporate Tax with a 5 percent Value Added Tax. 164 countries compete in globalization with a VAT. This tax cut releases $2 trillion in offshore profits for Corporate America to repatriate tax free and create millions of jobs. Last year's 35 percent Corporate Tax produced revenues of $327 billion. A 5 percent VAT for 2014 would have produced $898 billion enabling Congress to balance the budget in two years rather than ten.
Wall Street, the Big Banks and Corporate America want to keep the China profits flowing and contribute to the President and Congress to do nothing to make it profitable to produce in the U.S. Corporate America doesn't want to build the economy of the U.S. - it's building the economy of China. Corporate America wants to curry favor with China. Corporate America doesn't want the President to enforce laws against closed markets, predatory practices and devaluation of currency. The business press favors doing nothing. The U.S. Chamber of Commerce favors doing nothing. The political pundits favor doing nothing.
Trump cries: "China's taking our jobs. Now that China is down, we
can't let China take us down with it." It's not China. It's the President
and Congress doing nothing.
Senator Fritz Hollings 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 Making Government Work (University of South Carolina Press, 2008).
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