Democrat Socialist policies are opposite to what Made America Great
The U.S. is the most exceptional and greatest nation on Earth. Our country managed to go from the birth of the nation to the world’s largest economy with the highest quality of life and the most powerful military in about 150 years. Other nations were hundreds — and some even thousands — of years older. That happened because of certain economic principles that were followed.
Individual freedom, individual responsibility, low taxes, limited government.
Perhaps most importantly was the principle of individual freedom. Citizens were free to pursue their dreams with minimal burden or intervention from the government. The economy was based on free-market principles. Of course, along with individual freedom came individual responsibility. That is, individuals were primarily responsible for their own welfare.
Taxes were kept low mostly because the country was founded as a result of high taxation. The low taxes allowed an income earner to keep nearly all of what was earned, which provided greater incentive for individuals to contribute more and earn more. This was a major factor in the rapid growth.
And finally, there was a very limited role for government at both the state and federal level. The government provided the basic services that we refer to as public goods and did little else other than provide leadership.
By following the principles of individual freedom, individual responsibility, low taxes, and limited government, America truly became exceptional and achieved greatness. But just as the greatness was finally achieved, policies began to change as more social responsibility was added to the economic policy.
Social responsibility grows.
In 1913, the U.S. instituted the federal income tax with an ever-increasing rate of taxation. In the mid-1930s, the government passed the Social Security Act, which eventually resulted in the ever-increasing Social Security tax. Then in 1965, Medicare was enacted, which resulted in a Medicare tax that has also increased over time.
These social programs shifted away from individual responsibility and toward social responsibility.
This year, the federal government will spend more than $2.7 trillion on Social Security, Medicare, and Medicaid. That’s more than 60 percent of total federal government spending. Worse yet, these programs are less than 15 years away from becoming insolvent.
These programs reduce individual freedom, reduce individual responsibility, increase taxes, and increase the role of government. While Americans are compassionate, perhaps the current mix between individual and social responsibility is not quite right. Perhaps we should bring back more individual responsibility.
Unfortunately, the Democrats want to do just the opposite. The Dems’ proposals, while appearing to cure perceived social injustices, will stagnate economic growth, reduce opportunity, worsen income inequality, and reduce individual freedom.
The Democrats propose programs like universal health care, free college tuition, increased spending on social programs, government payments to those unwilling to work, taxes on individual wealth, and higher taxes on income.
These programs all focus on transferring income away from those who earned it and toward those who, for whatever reason, did not earn it. That means the income is transferred to the lowest income earners while the rest of the population pays for it. These programs go further than the growth-stifling programs of the Obama administration.
Obama administration prioritized social responsibility.
The Obama administration gave free or low-cost health insurance to about 6 percent of the population or about 20 million people. Obama increased food stamp payments, removed the work requirement and increased payments for welfare recipients while raising taxes on all Americans, especially the highest income earners. The result was a stagnant economy.
In fact, Obama was the only president in history to serve a term in office without having at least one year where GDP growth was at least 3 percent. He averaged about 2 percent growth over his eight years in office.
Since President Donald Trump has been able to eliminate many growth-stifling regulations and reduce tax rates for all Americans, the economy is finally starting to grow at about a 3 percent rate. By eliminating some deductions in the tax code, individuals were forced to become more responsible for their own expenses.
Going forward, economic growth can accelerate if economic policy follows the principles of individual freedom, individual responsibility, low taxes and a limited role for government. Policies opposite to those principles will continue to hold back economic growth.
That doesn’t benefit anyone.
Michael Busler, Ph.D. is a public policy analyst and a Professor of Finance at Stockton University where he teaches undergraduate and graduate courses in Finance and Economics. He has written Op-ed columns in major newspapers for more than 35 years. @mbusler www.facebook.com/fundingdemocracy