Presidents Ronald Reagan and George W. Bush, having scorned income taxes and budget-balancing, have left the U.S. in a desperate economic fix by unnecessarily selling national debt bonds.
Reagan took a long-standing income tax of 70 percent and dropped it to 28 percent. After inauguration, he bought a pot of military junk and caused a national debt of less than $1 trillion to expand to $3.5 trillion.
Bush unadvisedly started two wars. Instead of asking for sacrifices from the taxpayers for his stupidity, he initiated two income-tax reductions mostly favoring the rich. Tax collections diminished along with a military spending increase. To fill the gap, Bush sold national debt bonds at an alarming rate, and the debt is now $16.7 trillion.
President Barack Obama inherited the resulting financial disaster. It’s not his fault.
Conservative Tea Party people and Republicans think we could balance the budget by depriving funds for Social Security, Medicare, Medicaid and food stamps. Obama says now is not the time.
That leaves the military as the main source of funds to balance the budget. Through the years, we have spent trillions on a military, and for that we have lost the last four wars; Korea, Vietnam, Iraq and Afghanistan. We lost all that money and suffered thousands of mutilated veterans. Republican insistence on a strong military seems to be the worst investment ever.
Special deals and loopholes at income tax time have allowed some individuals and corporations to double their assets since 1970. Obama says we should eliminate all subsidies, and all sources of income should be taxed.
Here is a fair, sacrificial start on reducing the federal debt to zero, where it belongs:
• 80 percent income tax rates for hedge-fund billionaires. They now pay 15 percent.
• 70 percent for millionaires. This rate was reduced by Reagan to 28 percent.
• 60 percent for people making $500,000.