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A Predictable and Stable Legal Order
A government with moral and legal authority promulgates written rules and universally, impartially and uniformly enforces the rules, which provides a predictable and stable legal order on which to base economic and personal decisions. The law prevails, not the proclamation or arbitrary decision of a ruler, government bureaucrat, the enforcer (e.g., policeman) or judge.Congress added more than $1.4T in debt in fiscal year 2010
Jay Heflin in The Hill reports on the enormous increase in debt:
The Committee for a Responsible Federal Budget (CRFB) estimates lawmakers added $1,412,038,866,702 to the debt for the 2010 fiscal year, which ended Thursday.
Who will pay this debt? Hans Seenholz, a small government advocate and economists, wrote: A government debt is a government claim against personal income and private property – an unpaid tax bill.
Incredibly, Congress has taken no steps to stop the debt tsunami.
Worse, for fiscal year 2011 Congress has no budget.
Double worse, by October 1 Congress is suppose to pass the 12 appropriation bills. None have been passed.
Triple worse, Congress went home to campaign rather than deal with expiring tax rates.
This dereliction of duty is a substantial cause for the dismal economic recovery. It is impossible for Americans and businesses to rationally plan and invest their time, money, intellect and labor.
What will stimulate economic growth? First, do not raise taxes. Second, reduce spending.
Edward Lazear, Chairman of the President's Council of Economic Advisers from 2006-2009, has a credible plan to reduce the deficit without raising taxes. Lazear writes in the Wall Street Journal, which was quoted in a previous post.
To reduce spending and reignite growth, this Congress or its successor should take two actions. First, immediately cut the level of spending that has been increased so dramatically since 2008. Second, institute an "inflation-minus-one" rule to constrain future spending increases....
Spending, not the deficit, is the most important measure of fiscal restraint. A fiscally irresponsible president could balance an out-of-control budget by taxing too much. That approach would hardly be conducive to economic growth.
To return to the healthier spending ratios of the past two decades, Congress should begin by enacting a budget that brings spending for fiscal year 2012 at least half way back to where it was in 2008. ….
Second, Congress should begin limiting future spending according to an inflation-minus-one rule. That rule would hold that in any year when the ratio of government expenditures to GDP exceeds 18% (the 30-year average of tax revenues), Congress could increase spending only by the last three years' inflation rate, minus one percentage point.
Because of incompetent governance by Republicans and Democrats, the American economy flounders, and the future is greatly threatened. For democracy and freedom to prevail, the American electorate must demand and force good governance. “Inflation-minus-one” must be forced upon all elected Members of Congress – Republicans and Democrats.