Home » First aid for the United States economy: revenue reform

First aid for the United States economy: revenue reform

It comes as something of a surprise to read pronouncements by some conservative gurus in the pages of mainstream newspapers such as the New York Times that “Obamacare is the principal cause of the economic recession and the U.S. debt crisis.” That’s curious. Didn’t the debt problem begin under President George W. Bush in 2001-2008? Didn’t the economic recession begin in late 2007, and didn’t President Obama take office afterward in January 2009?Or try this: “U.S. debts will continue to grow primarily because the new law doesn’t reduce federal spending on health care, especially Medicare.” How dreadful! Should we abolish Medicare to save the nation? Here in fact-free America, we all know that “truth has a well-known liberal bias.” But, I ask you, from where do these pundits and columnists get their facts?Let’s make a quick check of the actual documented facts instead of the guru-imagined facts. What in actual fact are the biggest, the most extreme, contributors to the nearly $9 trillion increase in U.S. debt over the last 10 years from $5.8 trillion in 2001 to more than $14.5 trillion in 2011? There were several contenders for most extreme, but it wasn’t Medicare.Number one, the hands-down winner, is the tax cuts under President George W. Bush coming in at an alarming, staggering $1.6 trillion. Number two is the increase in interest costs due to borrowing from the Chinese and others at a whopping $1.4 trillion. (We borrowed our way into Iraq and Afghanistan.) Oh yes, and then there’s number three, the direct costs of the wars in Iraq and Afghanistan, coming in at $1.3 trillion. Those are the big ones, the most extreme, costing in the trillions.Now let’s shift gears and look at the medium-sized stuff, the ones costing only billions, not trillions. Number four is the Obama economic stimulus package, way down at $800 billion. Then there’s number five, still more tax breaks under Obama, amounting to $400 billion. (Together, tax breaks of $1.6 trillion plus $400 billion equal $2.0 trillion, tilted mainly to favor the super-wealthy in America.)And now at last, way, way down the list, comes number six, the notorious Medicare, notably the Medicare prescription drug plan, at a measly $300 billion. (That’s less than one-sixth the size of the overall tax holiday of $2.0 trillion.) Medicare is down there with number seven, the financial industry bailout at $200 billion. Thus, if there’s one thing that isn’t the principal contributor to the recession and the U.S. debt crisis, it’s Medicare.If cost overruns in Medicare had really been the principal cause of the debt crisis, we’d have to ask ourselves why, after all the hot air, didn’t Congress, in its wisdom, concentrate on the various means, some of them obvious, for reducing the costs of insurance, medical services and pharmaceuticals? Well, let’s not go there right now. Let’s take a more promising, larger, pragmatic approach. Let’s address first what is in fact the single most prominent cause of the economic meltdown and the U.S. debt crisis.The principal culprit, the ultimate cause, of current and future economic recessions and debt crises is the failure of certain Americans, mainly the already super-wealthy, to pay trillions of dollars in fair tax revenues due to questionable tax avoidance practices, unlawful tax evasion, unreported and untaxed securities and dubious financial paper transactions, and the maintenance of fake offices and fat accounts in tax havens abroad for the sole purpose of criminal tax evasion. Each of these issues can be solved directly by firm legislation and executive enforcement action, even before taking up the more arduous, longer-term task of rewriting the entire U.S. Tax Code.You would think that Congress, the media and the American people would look first at the principal problems and their obvious solutions before debating cuts to programs that benefit the citizens and the economy of our nation. They would start by addressing the revenue side of the economic equation. Recognizing that the primary answer to economic recession and national debt is honest, fair and balanced tax policy, they would focus their debates on what that policy should be and how to ensure that all Americans pay their fair share of the tax bill. Instead, Congress has established a Super Committee of 12 to recommend ways to make at least $1.5 trillion in cuts over 10 years. Nothing in the birth announcement requires the Super Committee to even consider revenues or reductions in tax breaks. This is a defect. Six of the appointed members appear ready to consider all options. But the other six are appointed precisely because they are ideologically and flatly opposed to any upward tax reform, even before the committee assumes its work. They will only discuss ways of further reducing tax revenue, not restoring fair and balanced tax revenues.This presages a failure. In November, we’ll be back at square one, addressing the same issues and blocked from dealing with the principal cause of the economic recession and the debt crisis. We’ll be forced to relive the same old sad story. Wouldn’t we avoid a lot of pain and suffering if we just addressed the revenue side of the problem first?First things first. Let’s place America first. Sharon resident Anthony Piel is a former director and general legal counsel of the World Health Organization.

More Information

TriCorner News

Copyright The Lakeville Journal
860-435-9873
PO Box 1688, Lakeville, CT 06039
All Rights Reserved

Membership