We Must Invest In Our Future
by Bob Henderson Chair, Kay County, OK, Democrats
If you think President Obama appears a little confused about what to do next, and he does, it’s because he knows what he should do, realizes he has no chance of obtaining Republican cooperation, and is not eager to be seen as going down in defeat.
If Democrats lose the 2012 election, the damage current Republican policies will do to the U.S. could actually push us into depression.
I have been reading up on what Franklin Roosevelt did right, and what he did wrong, during the Great Depression. Whoever said if we don’t study history, we’re condemned to repeat it, was right.
Most of this we would be lucky to repeat!
During FDR’s first term, he borrowed heavily and pumped the money into the economy. It responded by beginning to recover. But in his second term, he became worried about the deficit and reversed courses. The result was four more years of depression.
During World War 2, everyone was willing to accept heavy borrowing in the face of the national emergency. Most of the money spent to win the war actually was invested in America’s manufacturing infrastructure, and pent-up demand for consumer goods following the war’s rationing carried our economy forward. Then Ike invested heavily in our infrastructure, most notably our interstate highway system.
FDR’s borrowing, 120 percent of our GDP at the time, was much higher relative to our current borrowing. It set the stage for 30 years of unprecedented growth, during which time working Americans prospered at historic levels. Bush’s borrowing doubled our national debt, created more billionaires, and left working families completely out of the productivity gains.
The crisis over the debt ceiling was entirely manufactured by Republicans, in deference to their new Tea Party majority. While Democrats did succeed, barely, in obtaining the increase in our national debt ceiling and avoiding immediate disaster, Republicans really won the battle. Their determined obstructionism completely changed the subject from the real crisis (unemployment) to a manufactured one (the debt ceiling). Our bonds still are the world’s safest place to invest.
Unemployment really is about 16 percent, clearly a national crisis. While we need a long-term plan to reduce our debt (by about $4 trillion over 10 years), right now we need to borrow to create the jobs and tax revenues that can pull us through this unemployment crisis. This time we must again invest the borrowed money in America, not in tax cuts. Our infrastructure is in dire need, and repairing it would create millions of jobs.
But what about the Republicans? Republicans actually want to lower taxes, even in the face of our revenue shortfall. Here’s a better solution, proposed by William Greider in “Come Home America.”
We should raise tax rates on corporations, perhaps to as high as 45 percent. But we could then reward corporations by lowering their tax burden for responsible behavior, such as creating jobs in America, taking steps to improve our environment, and ensuring that all their employees benefit from gains in productivity. All this would be in stark contrast to their current behavior and shocking lack of loyalty to America.
Our tax revenues are about 15 percent of GDP. They need to be about 20-21 percent. Even Republicans say they should be 18-19 percent. (The difference is the cost of social safety-net programs like Medicare, Medicaid, and unemployment benefits.) So we’re currently borrowing 40 cents on every dollar we spend, which is about the same as FDR borrowed during World War 2, yet we’re gaining none of the benefits FDR and Ike won for us.
Republicans think we can only do one thing at a time. But FDR and Ike proved otherwise.
So what will it be? Invest in America’s future prosperity? Or allow Republican obstructionism to destroy it?
Tell your Congressional representatives which you prefer.
