How Do We Get Out of This Mess?

My wife and I just returned from a delightful time at a family reunion in Louisiana where scores of us sat around, ate, snacked on ice-cold watermelon and discussed the affairs of the day. The topic at this reunion was overwhelmingly unemployment and the poor state of our economy.
Judging from the open discussions, I did not think Mr. Obama had any supporters at all. Most of the family there has some connection or other to oil and the moratorium on offshore drilling has hit the state hard.
In more private conversations afterward, I heard support for him, particularly for making the rich people pay higher taxes. They said they kept their mouths shut in groups because they did not want to risk censure.
But where is truth? What do we need to do to get America back on her financial feet? Will further taxing the rich more do it? We should first ask, what do the rich do with their money? The fact is, most of their wealth is in the form of businesses.
It seems to me, if we take it away from them and, via larger government, give it to the “unrich,” what will happen? Wouldn’t it then follow that businesses would have less to invest in things that make jobs, and the “unrich” will have more, which they will spend on consumer goods, not machines.
Prof. Robert Lucas, University of Chicago, is referenced in the Wall Street Journal, stating that for the first 70 years of the 20th century, continental Europe’s growth rose alongside that of the U.S. and U.K. Through the 1960s, there was every reason to expect a common, high living standard for all of us. Then in the 1970s, Europe’s stalled. A 20-40 percent gap in income emerged between the U.S. and Europe, representing the cost of a larger welfare state from 1970 onward.
Right now, with 37 percent of young people being unemployed or underemployed, according to the Bureau of Labor Statistics, how will reducing the amount of money businesses have to invest lead to more jobs? In the ’80s and ‘90s, when we weren’t thinking about taking from the rich, we created 44 million new jobs, per Prof. John B. Taylor, Stanford University.
We in Cape May County remember clearly when Canada was on the large-government track; their dollar fell from over 100 of our cents to 60. Now that they have tightened up their finances, their dollar has rebounded, and they can again afford to visit us.
There is another problem. America has always been the place where people with good ideas and a lot of energy could thrive, or even grow rich. If we take their money, and impose ever-greater regulations, why would they continue to drive themselves? Okay, say we just take a little more from them. The thing is, we could take everything they have and we would not begin to solve our federal government’s financial problems.
This means we have to get our financial house in order. Did you know that a little over a hundred years ago, under the Grover Cleveland administration, our federal government was taking in 50 percent more money than they were spending?
We don’t really have a problem to solve; rather we have a decision to make. Either we want a big federal government, and we resolve to pay the cost of it, or we limit our expectations of our federal government. It is ours to decide.
Art Hall, publisher