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.
• 50 percent for people making $250,000.
• 35 percent for the upper middle class.
• 30 percent and under for various intervals downward.
Of course, when the national debt hits zero, we will no longer be paying substantial interest charges to our Communist friends (former bond owners), the Chinese.
With a little intelligent thought, we would see that we pay almost twice as much per capita as England or Canada for health care. In 2011, we spent $2.4 trillion on health care. Why didn’t we copy (yes, copy) one of their health plans, warts and all? We would get a health plan as good as or better than ours, and still have $1.2 trillion available to pay down the national debt each year.
Imagine, in five years, that’s $6 trillion in debt retirement. What’s the problem with using this plan? “Socialism,” some say. Both England and Canada long ago discovered that allowing their free-enterprise system to take part in health care was wrong. So “socialism” is the secret that allows them to provide health care so cheaply compared with the U.S.
Maybe we should have a K-12 syllabus in all schools that explains how “socialism” is better than free enterprise under certain circumstances.
BOB JOYCE is a Cooperstown resident. Contact him at email@example.com.