My beloved home state of Michigan is snagged in an ugly and self-imposed economic and social snare.
Michigan is on economic life support. With unemployment already hovering at fifteen percent and with the automotive industry going the way of the Dodo bird, the bad times for Michigan may have just begun. Michiganiacs beware: things could get much uglier for the Wolverine state before it gets better.
The automotive industry, the foundation of Michigan, and dare I say America, is bankrupt and dying. Taxpayer bailouts, loans to the poorly managed and union controlled car companies, and even a $4,500.00 taxpayer subsidy for people who trade in their older cars for fuel efficient cars may only be postponing the inevitable. Death may be on the doorstep of my old hunting grounds in Dearborn.
According to a July 6 University of Michigan economic article, Michigan will lose over 300,000 jobs from end of 2008 to the end of 2009. The Detroit Free Press reported on July 21 the average sale price for a home in Detroit is a paltry $6,500.00.
If that news isn’t bad enough, I read an op-ed in the Wall Street Journal that Detroit’s poorly run and union-controlled public schools are expected to file for bankruptcy protection any day now. According to that op-ed, only one out of four children who enter the ninth grade graduate on time, the proficiency scores of kids in the Detroit public school system are dismal compared to other Michigan school systems while the Detroit school system spends $1,700 more per student than other Michigan school systems. The Detroit public school system is not just the worst in Michigan, but the worst in the nation. Nice going NEA.
It breaks my heart to admit it, but Michigan is a model for failure. But it isn’t alone. California is also bankrupt and has now begun issuing I.O.U’s and other states are teetering on the edge of financial ruin due to brain dead economic policies. It seems to be a liberal democrat/RINO death march in nearly every case.
While Barry O would surely blame President Bush for the bleak economic status of Michigan, California and other states, the problem has been that the states with the worst financial conditions are states that have been controlled by the Democrats for the last couple of decades.
Democrats continue to believe in taxing and spending, even in times of severe economic slow downs. When states should have been making financial hay by lowering taxes and encouraging economic growth during the economic heydays, the size of government grew and the clowns who ran these governments spent money they did not have.
The most basic of economic truisms is that a government cannot tax, spend or borrow its way to prosperity. President Obama either refuses to accept this economic truism or he has other malicious and disastrous plans for America up his sleeves.
Newt Gingrich and his America Solutions organization have it right if we truly want to jump start the economy and set forth the conditions to create good, permanent jobs.
1. Cut taxes 50% for individuals and businesses. Putting this extra cash in the hands of people and small businesses would ignite the American economy like pouring gas on a fire. Barry O and crew are doing everything they can to pour gallons of water on already dwindling embers of capitalism.
2. Eliminate the Capital Gains tax. Newt argues this will provide the capital to build new factories, enable entrepreneurs to start new businesses, create new technologies, etc. History shows that his arguments are bullet proof.
3. Drastically slim down the corporate tax rate, which is among the highest in the world. Reducing our corporate tax rate to that of Ireland (12.5%) would make America a magnet for new companies which would hire American workers.
4. Kill the Death Tax. Taxing the after tax savings of Americans is immoral, mob-like behavior. Killing the death tax would unleash hundreds of billions of dollars that Americans could use to start new businesses and hire Americans.
Newt and his American Solutions ideas to get Michigan and America moving again are spot-on. Barry O and his hyperliberal school boy crew are dead wrong. Americans are paying the price for Barry O’s anti-freedom, anti-capitalist, and very anti-American economic policies.
Never give the car keys to a drunk. Never try to live with grizzly bears. And never turn your economy over to a former community rabble rouser who believes in disproved, failed economic policies.