A Letter to Congress

Written By: Kirk Peterson

Psychology Determines Prosperity

In all my study on economics and finance, I have found the one simple truth that the psychology of the nation determines our economic prosperity.  Their fundamentally is no greater indicator to economic success then the confidence of the people.  I don't know about you, but I see a lot more people in my neighborhood with Christmas lights outside there house this year.  People are beginning to have positive outlooks about the future again and it shows in their actions.  It is for this VERY reason that congress can NOT afford to go over the 'fiscal cliff'.  Not only did the Central Budgeting Office state that we would go into recession if we let this happen, I can promise you if Washington does not act, the psyche of the nation will take a major hit and the confidence not only in congress but in the economy will falter--which will only lead us to another recession. 

So what can our leaders in Washington do?

Where the 'Fiscal Cliff' negotiations stand

The Democrats want the highest tier income tax rates to increase back to the Clinton Era levels.  The Republicans want major spending cuts.  Both parties want tax reform.  The Executive branch wants the same thing the Democrats do with increases in taxes.

Attack the Problem at the Source

A balanced approach does sound promising.  However, by raising tax rates, you only cover over the real problem with the budget--SPENDING.  I definitely don't agree with raising taxes in a fragile economy like we see but unfortunately the Democrats & Obama will not budge.  Also, I think the Republicans would be willing to raise tax rates to the Clinton Era level if they knew there money would not be wasted with government inefficiency.

The Bottom Line: ACCOUNTABILITY

The private sector has proven throughout history to be incredibly more efficient then big government.  Why?

The biggest problem with government and it's inefficiency is that they are not held ACCOUNTABLE.  In the private sector, businesses are held accountable by their shareholders, if a project goes bad and way over budget, stock prices start to tank and people loose jobs.  With government, they just write another check and push things along.  With our budget crisis at the dangerous levels we now find ourselves, we can not afford NOT to hold our government accountable.

I propose the Republicans agree to the Clinton Era Level tax rates if they get radical spending cuts from the Democrats.  I suggest we create a PRIVATE (not public) De-regulation Commission that is in charge of going line item by line item on looking at Government programs to cut the fluff and create quantitative accountability for each and every Government program. 

The US tax code is over 70,000 pages for heavens sake!  No one is going to put the tremendous amount of work in that is required to reign in the massive amount of government spending & waste we have without creating a commission to do it.  Of course the government would want to have checks and balances over this proposed agency, but you get the idea...

There you have it congress.  Your solution to the 'fiscal cliff'.  I believe in making things easy.  Stay big picture on setting the framework and attack the SOURCE of the spending problem rather then just raising taxes to pay for government inefficiency and waste.