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Copyright © 2010 by F. Scott Sinclair. All Rights Reserved.
The Last Chance
An Op-Ed by Novelist F. Scott Sinclair
After seeing what the British finance minister is doing regarding his proposed austerity program for the U.K., and the recent article by Paul Krugman: I’ve become skeptical of austerity programs, or Keynesian spend and tax programs as advocated by Mr. Krugman.
One can perceive that the Keynesian governmental stimulus method has its credible and logical merits. On the other hand, it’s like someone playing 21 (blackjack) in Reno or Las Vegas, who doubles their bet if they lose a hand. But you can only double your bet(s) so many times before you can no longer afford to double down on those losses to recoup them. America is at that turning point where Keynesian economics of spend—spend—spend , and tax—tax—tax no longer works.
In my view, thirteen trillion dollars (now, but that amount will certainly rise astronomically) is the tipping point. If inflation and interest rates go up, we’re screwed blue and tattooed, my friends. As simple as that, I’m afraid.
What’s the solution to our economic woes? Well, taxing the rich is a starter: in 2011 the tax breaks for the rich expire. Is that all there is to it? Nope. That’s just the beginning. Congress has got just one shot (chance) of saving our economy. They must (I repeat, must…) pass a VAT tax, or we’ll never ever as a country dig ourselves out of debt. That’s the bottom line: a VAT tax must be made "the law of the land." A fair tax as some advocates are espousing? No. The individual income tax cannot be repelled until the damage done by the foolish spending by our government has been eradicated and cleaned up. The government is no longer able to raid the Social Security trust fund and issue IOU’s they never intended to repay.
There’s only one way to make America solvent again, and that’s a VAT tax of a significant amount. Remember this: Congress will only have one chance to redeem themselves in order to save our financial system. Why? Because a new source of revenue like a VAT tax is able to generate a significant amount of revenue: enough to payoff America’s total debt obligation in a reasonably short period of time. There is no other choice, I’m afraid. If Congress tries to use the new source of revenue to stimulate the economy, pay for health care, entitlements (you name it), then inflation and sky-high interest rates will nullify the ability of the VAT tax revenues to bring America back onto a sound footing, and a complete fiscal recovery. Hence, this is the only chance Congress has to redeem itself and the country by being responsible and using the VAT revenues wisely. This will be the last chance for America to double its bet at the blackjack table. There will never be another chance. Period. That’s it… Pure and simple. Congress: the ball’s in your court. Remember what John F. Kennedy said, and recall the contents of his book “Profiles in Courage” and his speech: “It’s not what your country can do for you, but what you can do for your country.” Think about that for a moment. Offer solutions to our country’s plight and problems—not just criticism. Actions speak louder than words.
What do I mean by that? It’s simple. Instead of condemning people for being on unemployment insurance when it’s not their fault, how about extending a hand to those less fortunate. A helping hand… How’s that…? By being creative and providing intern jobs for say—98 weeks—at every sort and kind of business enterprise imaginable, at no cost to the employers. We do it for university students as part of their curriculum in a nonpaying status, why not do the same thing for the unemployed: except they’ll get their unemployment benefits, killing two birds with one stone. If the employee shows potential, within two years the employer can take over the reins of payment (payroll) and you have a win-win situation. The employer has an employee for free for nearly 2 years (hopefully for the next 30 years), the employee is learning new skills or showing off existing skills with an unemployment check in hand for the same period. And the government wins by doing several things: providing a job, training, money, opportunity—and potentially creating a taxpayer in order to generate new sources of revenue, home buyers, consumers, etc. that will help to increase GDP. That’s what I’m talking about.
In conclusion, I'd say that a national sales tax (or vat tax) would be considered the gasoline (fuel) for our restructured economy. And what about the existing federal income tax? Consider the current income tax as the timing and dwell of our rebuilt (revitalized) engine (economy). Fine tuning the economy is essential in order to stimulate various segments of the economy as needed according to economic conditions at any given time. America has an ace up their sleeve: a VAT or national sales tax is the key to the survival of our capitalistic way of life. Use the gas (VAT) to be used only to eliminate deficits, and the tune-up (the current income tax) will direct the resources (revenues) to the where such funds are required: including the deficit. Over time, the income tax brackets can be reduced, and/or eliminated if Congress is taught to be frugal. In additional, it would be wise to pass a constitutional amendment requiring a balanced federal budget to guarantee that Congress must have a balanced budget, not just provide lip service to that affect.
C’mon, America…! Let’s batten down the hatches, and get our asses in gear. Okay? And that means you, too. Yup, I’m referring to those in Congress. Get your arses in gear, as the British would say!
Nuff said. The seashell between my ears is howling…!
Humbly yours,
Novelist F. Scott Sinclair
P.S.—I’m just trying to be helpful. Thank you for your time.
