Thursday, October 27, 2011

Saving the American Idea: Rejecting Fear, Envy and the Politics of Division By Paul Ryan

Source: http://paulryan.house.gov/News/DocumentSingle.aspx?DocumentID=266160

October 26, 2011

The Heritage Foundation – Washington, D.C.


Remarks as Prepared for Delivery


Thank you so much, Ed, for that kind introduction.


We’re here today to explore the American Idea, and I can’t think of a better venue for this topic. The mission of the Heritage Foundation is to promote the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.


These are the principles that define the American Idea. And this mission has never been timelier, because these principles are very much under threat from policies here in Washington.


The American Idea belongs to all of us – inherited from our nation’s Founders, preserved by the countless sacrifices of our veterans, and advanced by visionary leaders, past and present.


What makes America exceptional – what gives life to the American Idea – is our dedication to the self-evident truth that we are all created equal, giving us equal rights to life, liberty and the pursuit of happiness. And that means opportunity.


The perfection of our union, especially our commitment to equality of opportunity, has been a story of constant striving to live up to our Founding principles. This is what Abraham Lincoln meant when he said, “In giving freedom to the slave, we assure freedom to the free – honorable alike in what we give, and what we preserve.”


This commitment to liberty and equality is something we take for granted during times of prosperity, when a growing economic pie gives all Americans the opportunity to pursue their dreams, to provide brighter futures for their kids, or maybe just to meet their families’ needs.


These are tough times. We know all too well that too many Americans are hurting today. And these hardships have reopened our longstanding national debate over what it means to be an exceptional nation. Have those periods of unprecedented prosperity in America’s past been the product of our Founding principles?


Or, as some would argue, have we made it this far only in spite of our outdated values? Are we still an exceptional nation? Should we even seek to be unique? Or should we become more like the rest of the world – more bureaucratic, less hopeful, and less free?


The American Idea is not tried in times of prosperity. Instead, it is tested when times are tough: when the pie is shrinking, when businesses are closing, and when workers are losing their jobs.


Those are the times when America’s commitment to equality of opportunity is called into question. That’s when the temptation to exploit fear and envy returns – when many in Washington use the politics of division to evade responsibility for their failures and to advance their own narrow political interests.


To my great disappointment, it appears that the politics of division are making a big comeback. Many Americans share my disappointment – especially those who were filled with great hope a few years ago, when then-Senator Obama announced his candidacy in Springfield, Illinois.


Do you remember what he said? He said that what’s stopped us from meeting our nation’s greatest challenges is “the failure of leadership, the smallness of our politics – the ease with which we’re distracted by the petty and trivial, our chronic avoidance of tough decisions, our preference for scoring cheap political points instead of rolling up our sleeves and building a working consensus to tackle big problems.”


I couldn’t agree more.


And yet, nearly three years into his presidency, look at where we are now:



  • Petty and trivial? Just last week, the President told a crowd in North Carolina that Republicans are in favor of “dirtier air, dirtier water, and less people with health insurance.” Can you think of a pettier way to describe sincere disagreements between the two parties on regulation and health care?



  • Chronic avoidance of tough decisions? The President still has not put forward a credible plan to tackle the threat of ever-rising spending and debt, and it’s been over 900 days since his party passed a budget in the Senate.



  • A preference for scoring cheap political points instead of consensus-building? This is the same President who is currently campaigning against a do-nothing Congress, when in fact, the House of Representatives has passed over a dozen bills to help get the economy moving and deal with the debt, only to see the President’s party kill those bills in the do-nothing Senate.




Look, we put our cards on the table. Earlier this year, the House of Representatives advanced a far-reaching plan filled with common-sense reforms aimed at putting the budget on the path to balance and the economy on the path to prosperity.


But instead of working together where we agree, the President has opted for divisive rhetoric and the broken politics of the past. He is going from town to town, impugning the motives of Republicans, setting up straw men and scapegoats, and engaging in intellectually lazy arguments, as he tries to build support for punitive tax hikes on job creators.


The tax increases proposed by Senate Democrats and endorsed by the President – when combined with the new taxes in the health-care law, and the President’s other tax preferences – would push the top federal tax rate to roughly 50 percent in just 14 months, while doing nothing to promote job creation.


This tax increase on so-called “millionaires and billionaires” would actually constitute a huge tax hike on the nation’s most successful small businesses. According to the Tax Foundation, the surtax would hit roughly 35 percent of small-business income.


As P.J. O’Rourke put it, “The good news is that, according to the Obama administration, the rich will pay for everything. The bad news is that, according to the Obama administration, you’re rich.”


Actually, the news is even worse. As a practical matter, when you try to chase ever-higher spending with ever-higher tax increases, you eventually run into a brick wall of math.


The President has been talking a lot about math lately. He’s been saying that “If we’re not willing to ask those who’ve done extraordinarily well to help America close the deficit… the math says… we’ve got to put the entire burden on the middle class and the poor.”


This is really a stunning assertion from the President. When you look at the actual math, you quickly realize that the way out of this mess is to combine economic growth with reasonable, responsible spending restraint. Yet neither of these things factors into the President’s zero-sum logic.


According to the President’s logic, we should give up on trying to reform our tax code to grow the economy and get more revenue that way. Instead, these goals are taking a backseat to the President’s misguided understanding of fairness.


Remember that 2008 debate, when ABC’s Charlie Gibson pointed out that raising the capital gains tax rate actually tends to drive revenues down?


Obama replied: “Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.” That’s the kind of logic we are unfortunately seeing today. 


Also according to the President’s logic, spending restraint is incompatible with a strong, well-functioning safety net. The belief that recipients of government aid are better off the more we spend on them is remarkably persistent. No matter how many times this central tenet of liberalism gets debunked, like Brett Favre, it just keeps coming back.


The President has wrongly framed Republican efforts to get government spending under control as hard-hearted attacks on the poor. In reality, spending on programs for seniors and for lower-income families continues to grow every year under the House-passed budget – it just grows at a sustainable rate. We direct tax dollars where they’re needed most, and stop spending money we don’t have on boondoggles we don’t need.


The President’s political math is a muddled mix of false accusations and false choices. The actual math is apolitical, and it’s clear: By the time my kids are my age, the non-partisan Congressional Budget Office projects that the size of government will be double what it is today.


Government health care programs alone will have grown to consume 45 percent of federal spending. The primary driver of this increase is runaway inflation in health care costs, which are rising at 2 to 3 times the rate of GDP.


It’s impossible to keep funding health care expenditures at this rate. Even President Obama has said, “If you look at the numbers, Medicare in particular will run out of money, and we will not be able to sustain that program no matter how much taxes go up.”


So the real debate is about how best to control these unsustainable costs. And if I could sum up that disagreement in a couple of sentences, I would say this: Our plan is to empower patients. Their plan is to empower bureaucrats.


The Republican plan gives individuals the power to put market pressure on providers and make them compete.


The President’s plan is to give 15 unelected bureaucrats in Washington the power to cut Medicare in ways that, according to Medicare’s own chief actuary, would simply drive providers out of business. This would result in harsh disruptions and denied care for seniors.


Pain like this simply can’t be sustained. So when it comes to out-of-control spending on entitlements, the President’s math simply doesn’t add up.


And his math is no better on the tax side. Let’s say we took all the income from those the President calls “rich” – those making $250,000 or more. A 100 percent tax rate on their total annual income would only fund the government for six months. Just six months!


What about some of the other tax hikes the President likes to talk about? Under the President’s policies, deficits are set to rise by a whopping $9.5 trillion over the next 10 years.



  • Letting the top two tax rates expire would equal roughly 8 percent of that planned deficit increase.



  • Eliminating tax subsidies for oil and gas companies would only equal 0.5 percent of the President’s planned deficits.



  • And what about corporate jet owners? That provision would reduce those deficits by just 0.03 percent.




Look, I’m all for closing tax loopholes – but you can’t close our nation’s deficits by chasing ever-higher spending with politically motivated tax hikes here and there. Instead, tax reform must broaden the base and lower rates.


This policy approach, which has attracted strong bipartisan support, would bolster our fiscal health by increasing competitiveness and encouraging more investment and job creation.


Lately, the President has been fond of taking Ronald Reagan quotes out of context, in an effort to persuade Republicans that Reagan would have agreed with the idea of using fear and envy to push a partisan agenda of permanently higher taxes.


Every time he does this, I can picture Reagan shaking his head: “There you go again.”


Obama quotes Reagan as saying that bus drivers shouldn’t pay a higher effective tax rate than millionaires. Well, that’s a no-brainer. Nobody disagrees with that.


But it is simply disingenuous to use this quote as evidence that Reagan would have supported the tax increases that Obama wants Congress to pass.


Reagan was attempting to build support for the landmark 1986 tax reform, a revenue-neutral law that reformed the tax code by lowering tax rates while broadening the tax base.


Reagan’s point – which President Obama clearly missed – was not that we should raise tax rates to chase out-of-control spending in Washington.


His point was that we should get rid of loopholes that are exploited by the few, so that we could lower everyone’s tax rates and help the economy grow.


The House-passed budget includes this kind of tax reform, which many agree would provide an immediate boost to the economy. Our budget proposed getting rid of scores of loopholes, lowering the hurdles for job creation and economic growth, and making our tax code fair, simple, and competitive.


In his address to Congress last month, the President said he agrees in principle with this kind of reform, especially when it comes to the uncompetitive way we tax our businesses.


This made Republicans think, well, we might have an opportunity here for the kind of genuine consensus-building that the President talked about as a candidate.


Yet he chose not to pursue this kind of tax reform. Instead, he sent us a partisan bill filled with the same stimulus proposals that failed two years ago, only this time he also asked for permanent tax hikes to go with them.


He’s also failed to work with us on another area where one would think we could find common ground: ending the lavish subsidies and government benefits that go to those who are already successful.


The House-passed budget was full of proposals to get rid of corporate welfare and crony capitalism.



  • Why are tax dollars being wasted on bankrupt, politically-connected solar energy firms?



  • Why is Washington wasting your money on entrenched agribusiness?



  • Why have we extended an endless supply of taxpayer credit to Fannie Mae and Freddie Mac, instead of demanding that their government guarantee be wound down and their taxpayer subsidies ended?




Rather than raising taxes and making it more difficult for Americans to become wealthy, let’s lower the amount of government spending the wealthy now receive.


The President likes to use Warren Buffett and his secretary as an example of why we should raise taxes on the rich.


Well, Warren Buffett gets the same health and retirement benefits from the government as his secretary.


But our proposals to modestly income-adjust Social Security and Medicare benefits have been met with sheer demagoguery by leading members of the President’s party.


The politics of division have always struck me as odd: the eagerness to take more, combined with the refusal to subsidize less.


Instead of working with us on these common-sense reforms, the President is barnstorming swing states, pushing a divisive message that pits one group of Americans against another on the basis of class.


This just won’t work in America. Class is not a fixed designation in this country. We are an upwardly mobile society with a lot of movement between income groups.


The Treasury Department’s latest study on income mobility in America found that during the ten-year period starting in 1996, roughly half of the taxpayers who started in the bottom 20 percent had moved up to a higher income group by 2005.


Meanwhile, half of all taxpayers ended up in a different income group at the end of ten years. Many moved up, and some moved down, but economic growth resulted in rising incomes for most people over this period.


Another recent survey of over 500 successful entrepreneurs found that 93 percent came from middle-class or lower-class backgrounds. The majority were the first in their families to launch a business.


Their stories are the American story: Millions of immigrants fled from the closed societies of the Old World to the security of equal rights in this land of upward mobility.


Telling Americans they are stuck in their current station in life, that they are victims of circumstances beyond their control, and that government’s role is to help them cope with it – well, that’s not who we are. That’s not what we do.


Our Founding Fathers rejected this mentality. In societies marked by class structure, an elite class made up of rich and powerful patrons supplies the needs of a large client underclass that toils, but cannot own. The unfairness of closed societies is the kindling for class warfare, where the interests of “capital” and “labor” are perpetually in conflict. What one class wins, the other loses.


The legacy of this tradition can still be seen in Europe today: Top-heavy welfare states have replaced the traditional aristocracies, and masses of the long-term unemployed are locked into the new lower class.


The United States was destined to break out of this bleak history. Our future would not be staked on traditional class structures, but on civic solidarity. Gone would be the struggle of class against class.


Instead, Americans would work, compete, and co-operate in an open market, climb the ladder of opportunity, and keep the fruits of their efforts.


Self-government and the rule of law would secure our equal, God-given rights. Our political and economic systems – rooted in freedom and responsibility – would reward, and thus cultivate, traditional virtues.


Given that the President’s policies have moved us closer to the European model, I suppose we shouldn’t be surprised that his class-based rhetoric has followed suit.


We shouldn’t be surprised... but we have every right to be disappointed. Instead of appealing to the hope and optimism that were hallmarks of his first campaign, he has launched his second campaign by preying on the emotions of fear, envy, and resentment.


This has the potential to be just as damaging as his misguided policies. Sowing social unrest and class resentment makes America weaker, not stronger. Pitting one group against another only distracts us from the true sources of inequity in this country – corporate welfare that enriches the powerful, and empty promises that betray the powerless.


Ironically, equality of outcome is a form of inequality – one that is based on political influence and bureaucratic favoritism.


That’s the real class warfare that threatens us: A class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules, and preserve their place atop society. And their gains will come at the expense of working Americans, entrepreneurs, and that small businesswoman who has the gall to take on the corporate chieftain.


It’s disappointing that this President’s actions have exacerbated this form of class warfare in so many ways:



  • While the EPA is busy punishing commercially competitive sources of energy, a class of bureaucrats at the Department of Energy has been acting like the world’s worst venture capital fund, spending recklessly on politically favored alternatives.



  • While the unemployment rate remains stuck above 9 percent, a class of bureaucrats at the National Labor Relations Board is threatening hundreds of jobs by suing an American employer for politically motivated reasons.



  • And while millions of Americans are left wondering whether their employers will drop their health insurance because of the new health care law, a class of bureaucrats at HHS has handed out over 1,400 waivers to those firms and unions with the political connections to lobby for them.




These actions starkly highlight the difference between the two parties that lies at the heart of the matter: Whether we are a nation that still believes in equality of opportunity, or whether we are moving away from that, and towards an insistence on equality of outcome.


If you believe in the former, you follow the American Idea that justice is done when we level the playing field at the starting line, and rewards are proportionate to merit and effort.


If you believe in the latter kind of equality, you think most differences in wealth and rewards are matters of luck or exploitation, and that few really deserve what they have.


That’s the moral basis of class warfare – a false morality that confuses fairness with redistribution, and promotes class envy instead of social mobility.


I’d like to introduce President Obama to the Ronald Reagan he isn’t so eager to quote – the man who said, “Since when do we in America believe that our society is made up of two diametrically opposed classes – one rich, one poor – both in a permanent state of conflict and neither able to get ahead except at the expense of the other? Since when do we in America accept this alien and discredited theory of social and class warfare? Since when do we in America endorse the politics of envy and division?”


President Reagan was absolutely right. Instead of policies that make it harder for Americans to rise, let’s lower the hurdles to upward mobility.


That’s what the American Idea is all about. You know, in the midst of all the joys and sorrows of our everyday lives, I think we sometimes forget why America was considered such an exceptional nation at its Founding, and why it remains so.


To me, the results of the Founders’ exceptional vision can be summed up in a single sentence: Throughout human history, the American Idea has done more to help the poor than any other economic system ever designed.


Americans, guided by our ideals, have sacrificed everything to combat tyranny and brutal dictators; we’ve expanded opportunity, opened markets, and inspired others to resist oppression; we’ve exported innovation and imagination; and we’ve welcomed immigrants seeking a fresh start.


Here in America – unlike most places on earth – all citizens have the right to rise.


Thank you.

Wednesday, October 26, 2011

My Tax and Spending Reform Plan:Individuals will have the option of paying a20% flat-rate income tax and I'll cap spending at 18% of GDP By Rick Perry



Source: http://online.wsj.com/article_email/SB10001424052970204777904576651330270547222-lMyQjAxMTAxMDIwNTEyNDUyWj.html

The folks in Washington might not like to hear it, but the plain truth is the U.S. government spends too much. Taxes are too high, too complex, and too riddled with special interest loopholes. And our expensive entitlement system is unsustainable in the long run.


Without significant change quickly, our nation will go the way of some in Europe: mired in debt and unable to pay our bills. President Obama and many in Washington seem unable or unwilling to tackle these issues, either out of fear of alienating the left or because they want Americans to be dependent on big government.


On Tuesday I will announce my "Cut, Balance and Grow" plan to scrap the current tax code, lower and simplify tax rates, cut spending and balance the federal budget, reform entitlements, and grow jobs and economic opportunity.


The plan starts with giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate. The new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents.


This simple 20% flat tax will allow Americans to file their taxes on a postcard, saving up to $483 billion in compliance costs. By eliminating the dozens of carve-outs that make the current code so incomprehensible, we will renew incentives for entrepreneurial risk-taking and investment that creates jobs, inspires Americans to work hard and forms the foundation of a strong economy. My plan also abolishes the death tax once and for all, providing needed certainty to American family farms and small businesses.


My plan restores American competitiveness in the global marketplace and provides strong incentives for U.S.-based employers to build new factories and create thousands of jobs here at home.


First, we will lower the corporate tax rate to 20%—dropping it from the second highest in the developed world to a rate on par with our global competitors. Second, we will encourage the swift repatriation of some of the $1.4 trillion estimated to be parked overseas by temporarily lowering the rate to 5.25%. And third, we will transition to a "territorial tax system"—as seen in Hong Kong and France, for example—that only taxes in-country income.


The mind-boggling complexity of the current tax code helps large corporations with lawyers and accountants devise the best tax-avoidance strategies money can buy. That is why Cut, Balance and Grow also phases out corporate loopholes and special-interest tax breaks to provide a level playing field for employers of all sizes.


To help older Americans, we will eliminate the tax on Social Security benefits, boosting the incomes of 17 million current beneficiaries who see their benefits taxed if they continue to work and earn income in addition to Social Security earnings.


We will eliminate the tax on qualified dividends and long-term capital gains to free up the billions of dollars Americans are sitting on to avoid taxes on the gain.


All of these tax cuts will be meaningless if we do not control federal spending. Last year the government spent $1.3 trillion more than it collected, and total federal debt now approaches $15 trillion. By the end of 2011, the Office of Management and Budget expects the gross amount of federal debt to exceed the size of America's entire economy for the first time in over 65 years.


Under my plan, we will establish a clear goal of balancing the budget by 2020. It will be an extremely difficult task exacerbated by the current economic crisis and our need for significant tax cuts to spur growth. But that growth is what will get us to balance, if we are willing to make the hard decisions of cutting.


We should start moving toward fiscal responsibility by capping federal spending at 18% of our gross domestic product, banning earmarks and future bailouts, and passing a Balanced Budget Amendment to the Constitution. My plan freezes federal civilian hiring and salaries until the budget is balanced. And to fix the regulatory excess of the Obama administration and its predecessors, my plan puts an immediate moratorium on pending federal regulations and provides a full audit of all regulations passed since 2008 to determine their need, impact and effect on job creation.


ObamaCare, Dodd-Frank and Section 404 of Sarbanes-Oxley must be quickly repealed and, if necessary, replaced by market-oriented, common-sense measures.


America must also once and for all face up to entitlement reform. To preserve benefits for current and near-term Social Security beneficiaries, my plan permanently stops politicians from raiding the program's trust fund. Congressional IOUs are no substitute for workers' Social Security payments. We should use the federal Highway Trust Fund as a model for protecting the integrity of a pay-as-you-go system.


Cut, Balance and Grow also gives younger workers the option to own their Social Security contributions through personal retirement accounts that Washington politicians can never raid. Because young workers will own their contributions, they will be free to seek a market rate of return if they choose, and to leave their retirement savings to their dependents when they die.


Fixing America's tax, spending and entitlement cultures will not be easy. But the status quo of byzantine taxes, loose spending and the perpetual delay of entitlement reform is a recipe for disaster.


Cut, Balance and Grow strikes a major blow against the Washington-knows-best mindset. It takes money from spendthrift bureaucrats and returns it to families. It puts fewer job-killing regulations on employers and more restrictions on politicians. It gives more freedom to Americans to control their own destiny. And just as importantly, the Cut, Balance and Grow plan paves the way for the job creation, balanced budgets and fiscal responsibility we need to get America working again.



Mr. Perry, a Republican, is the governor of Texas and a candidate for president.

Sunday, October 23, 2011

Columns By Herman Cain



Universal Choice Can Fix the Health Care Roof

Mar 26, 2007

Source: http://townhall.com/columnists/hermancain/2007/03/26/universal_choice_can_fix_the_health_care_roof/page/full/

A simple change in the antiquated tax code would create an avalanche of universal choice in health care, instead of current proposals that produce universal dependence on government. Namely, the U.S. should eliminate the deductibility discrimination between employers and employees for health insurance premiums.

The ideal solution would be to replace the tax code with the Fair Tax, which essentially replaces the income tax with a consumption tax. But since few politicians with a bully pulpit have shown the moral or political courage to lead the sizeable Fair Tax movement, let's start with the second best approach, universal deductibility.

Universal deductibility of health insurance premiums by employers, employees, the unemployed, individuals and business owners would connect the consumer to health care costs. When people spend their own money, they spend it more wisely. Most people will purchase health plans they can afford, instead of expecting more benefits from their employer or the government.

The flagrant flaw in most of the ideas proposed by the presidential candidates is that they are variations of socialized health care.

Hillary Clinton, Barack Obama and John Edwards have all offered health care plans that eliminate individual choice and increase government mandates on employers, individuals and health care providers.

RomneyCare in Massachusetts is already experiencing a cost explosion. The only Republican to propose a market-based solution is Newt Gingrich, who has not yet declared his candidacy.

The proponents of socialized health care do not believe individuals and doctors possess the ability to make their own health care decisions. They would rather take advantage of what Steve Forbes recently described as "the abysmal ignorance of so many – including boatloads of business executives and entrepreneurs – about what it takes to bring rationality, productivity and lower prices to the U.S. health care market."

The greatest flaw of Health Savings Accounts (HSAs) and President's Bush's new proposal is that they are tied to the disastrously flawed tax code in the form of yet another tax deduction. These plans are improvements on the current discriminatory system, but they further complicate an already incomprehensible tax code.

The president's proposal, which allows deductibility of health insurance premiums, has a hidden "sneak-a-tax." Under the Bush plan, if your employer pays more than $15,000 for your annual health insurance premium, you pay tax on the excess coverage. Below that amount for a typical family, the plan provides only small, non-game-changing savings. Worse, the plan is not indexed to inflation. When inflation eventually catches up to the $15,000 deduction, families will suffer the same tax penalties posed by the Alternative Minimum Tax.

HSAs are another concept that was supposed to "move us in the right direction" of more affordability and accessibility of health insurance. HSAs have worked for many, but way too slowly as health care costs and insurance premiums have increased at annual double digit percentages.

The socialists among us object to universal choice because they fundamentally believe that government can spend people's hard-earned money better than the person who earned it. The bureaucrats object to universal choice because it would force them to cut wasteful spending to "offset" the "lost" revenue from allowing the deduction. That's political speak for "our job is to continue to rearrange the deck chairs on the Titanic."

Even with universal choice, the liberals will still scream about the 47 million people who do not have health care. They will ignore the 63 percent of the uninsured who work for small businesses that cannot afford health insurance coverage because the costs keep rising faster than their profits. Conservatives ought to counter with the 253 million people who have private health insurance that four of the presidential front runners want to take away.

As I stated on an NBC health care special in 1994, if you have a leak in the roof of a building and you know that the roof is leaking, you don’t blow up the building to fix the leak in the roof. That's what total government control would do to our health care system. The system will work if government would get out of the way. We don't have to blow up the system to fix a few leaks.

Universal deductibility would stimulate universal choice, which would fix the leak in our health care system's roof while making the building stronger.

The free market system, in which the consumer has access to information, choices and his own money, has driven down the prices of all goods and services that government has not overregulated or over-controlled. With a simple change in the current tax code to eliminate discriminatory deductibility for health insurance and eventually health care costs, free market dynamics can solve another problem that Clinton, Obama, Edwards and Romney want to make worse.

Universal choice in health care is a choice the public must demand. Otherwise, they will have to live with the disease of socialized health care.


Herman Cain is the National Chairman of the Media Research Center’s Business & Media Institute. He is the former president and CEO of Godfather’s Pizza, Inc., and currently is CEO and president of T.H.E. New Voice, Inc., a business and leadership consulting company.


To fix America, start by solving the right problem

September 18th, 2011

The first step in solving a problem is to make sure you are working on the right problem. I know this observation sounds like common sense but it is void in the White House and Washington, D.C. We have become a nation of crises, and this administration continues to miss the target as to what the problems are, and therefore the crises get worse.


We have an economic crisis followed closely by crises in energy, immigration, foreign policy, national security and the most severe crisis – a deficiency of leadership.


The president’s recent jobs speech was just that, a speech. It was not a plan to stimulate jobs and economic growth, because it did not contain meaningful fuel for the economic engine of our economy, which is the business sector. His speech contained a lot more government spending and a few tax trinkets to businesses.


Stimulus I of nearly $1 trillion did not work. It is totally illogical to expect another package of nearly $450 billion to work. More spending is not the problem. Lack of economic growth is the problem. The economic outlook is dim.


This is why I have proposed my bold 9-9-9 economic growth and jobs plan discussed in previous commentaries, and on my website www.hermancain.com. It significantly reduces taxes on businesses and workers because of an expanded revenue base of corporate, individual and retail sales. It also eliminates the payroll, capital gains and death taxes, and reduces the tax on repatriated profits from a top rate of 35 percent to 9 percent.


The companion problem that’s holding economic growth back is uncertainty. Since the Congress and the president were only able to extend the 2009 tax rates for two years, it left businesses asking, “Then what?” They did not get an answer out of Washington, and now the president is hinting at substantial tax increases to pay for his nearly $450 billion spending speech.


We are nearly 70 percent dependent on foreign oil. Since the Congressional Research Service has documented repeatedly that we have enough natural resources in oil, coal, natural gas and shale oil to become energy independent, it would seem logical to remove barriers that are in the way. In this case, it’s government regulatory agencies such as the EPA, which has gone wild. Just ask any oil and gas businessman or farmer and they will give you an earful.


Illegal immigration is a four-part problem. We must secure the borders for real and stop claiming that the southern border is safe as the administration has said. Ask any of the sheriffs that work along the border, and again they will give you an accurate assessment. Secondly, we must promote the current path to citizenship and clean up the bureaucracy that discourages immigrants from coming through the front door. Thirdly, enforce the immigration laws but make it easier for businesses to obey the law with e-verify and other technologies. Fourthly, empower the states to enforce the federal immigration laws. The federal government has failed repeatedly at enforcing our immigration laws.


My approach to foreign policy is an extension of the Reagan philosophy, “Peace through strength.” In a world that is not safer by any measure, my philosophy is “peace through strength and clarity”. We must clearly identify our friends in the world, and clearly identify our enemies, and stop giving money to our enemies. Our enemies must clearly understand that we will stand with our friends, such as Israel.


This administration has weakened our national security by placing a priority on Defense cuts instead of a priority on enhancing our defense capabilities with advances in technology. The most memorable example was cancellation of the Ballistic Missile Defense system being built in Turkey. That decision made us and our friends more vulnerable in that part of the world.


Where there is no vision, there is no leadership and problems don’t get solved.


And the nation suffers.


Replacing President Obama in 2012 is definitely the right problem to work on.