A Conservative Pro-Growth Austerity Plan

Conservatives have come out and endorsed a debt reform plan that will work called the Cut, Cap, and Balance Plan.  I believe we can do more.  I believe America can do more.  Let me be very clear: default would be and will be a serious problem that would make an already serious problem worse.  Nobody, including Conservatives, is advocating for going into default.

We must substantially cut federal spending.  The notion that we can continue to raise taxes (I mean, “raise revenues”) to cover our debt and deficits is outrageous.  The only way to nip our debt problems in the bud is to cut spending.  Looking at what our annual deficit is, it looks to me like we’d need to cut spending ranging from $120-130 Billion per month to cover our annual deficit (that's if our annual deficit is about $1 trillion).  The biggest spending drain on our economy is the so-called “entitlements.”  We need to either restructure or eliminate the entitlement programs.

We also need to cap federal spending.  Caps are the only true enforceable way we can put federal spending on a path to a balanced budget.  We ought to cap federal spending at 20 percent of Gross Domestic Product (GDP), and designate 4 percent of that 20 percent towards military and defense spending while eliminating wasteful spending.  Then force the federal government to balance the budget with a Constitutional Amendment that both limits spending and requires a super-majority for raising taxes.

Now that we’ve begun to get federal spending under control, we must have sustainable economic growth through keeping taxes low.  Take the corporate tax rate to zero percent.  Corporations do not pay these taxes; individual consumers pay them through increased prices.  The corporate tax was just Congress’ way to raise individual income taxes indirectly.

Next, eliminate the capital gains tax and the tax rate on repatriated profits of foreign profits for US companies, so that the business sector can make investments and create jobs.  Then make the tax rates permanent.  Give both workers and employers a 6.2 percent payroll tax holiday for one year so that the economy can grow faster.

Eliminate all subsidies because a subsidy is just another name for a tax on consumers.  Force companies and products to compete on a level playing field in the free market.  We also need to streamline, and possibly eliminate, all unnecessary and burdensome regulations.  Get the government out of the way.

The plan that I have outlined will be hard, but it will work.  America will need leaders who will be able to make the hard decisions to keep us from becoming the next Greece.  It’s time we start self-governing ourselves and get the government out of the way.