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Tuesday, October 23, 2012

Economic Growth and Taxes - Romney-Ryan Arithmetic

Steve Coll http://en.wikipedia.org/wiki/Steve_Coll  Pulitzer Prize winning American journalist and writer. Coll is currently president and CEO of the New American Foundation.

The New Yorker Steve Coll commentary in the October 22, 2012 exposes how close Congressman Ryan would be to executing startlingly extraordinary tax changes if he has influence over public policy.  Although Coll writes a serious commentary, the ramifications of his opinion are as alarming as anything we can spectre up on Halloween.  Let's never let this happen by voting Ryan out of government, altogether. 

For example, Coll writes, "Ryan opposes any increase in taxation, and he is a social conservative who advocates shrinking the federal government by degrees unprecedented in recent history.  Mitt Romney's decision to anoint Ryan as his running mate and ideas man remains the year's most revealing political move - a clear signal, amid the campaign noise, of what is at stake in (the) Presidential vote."

Moreover, Ryan accuses Democrats of regulating too much and "turning the (US) Constitution on its head."

Julie's opinion:  Ryan must not read the US Constitution because I certainly don't know of any clause where the government is required to be involved in regulations.  Regulatory policies and laws are enacted by the US Congress.  Ryan is in a Congressional leadership position to change regulations, if he doesn't like them.

Moreover, Ryan has no evidence that his tax policy (meaning, "no taxes") will work.  Coll writes, "...(although) the United States has economic and fiscal problems (the) evidence that they result from high taxes is scant.  America's top marginal federal income - tax rate this year - thirty-five per cent - is lower than that of Australia, Japan, Italy, France, Germany or Great Britain.  Nor is the US government disproportionately large.  The size of the government as a share of the economy is a is a quarter less than it is in France, and is well below the European average.  (Although) America's debt load is unsustainable, the history, math and common sense suggest that it can't be reduced, never mind retired, without some new tax revenue."

Americans must realize how raising expenses by paying for two wars in Iraq and Afghanistan while expanding the Medicare Part D pharmaceutical benefit, must be funded with responsible tax revenue.  Simple arithmetic exposes the false Ryan summation.  Either Ryan fully intends to cut more federal programs to create a balanced budget or he must support raising taxes.  

Most important is to realize how economic growth is stimulated by an investment of tax revenues.  For example, what's defense spending other than an investment of tax revenues in creating jobs?  This is the same rationale for tax revenue invested in education, in health care and space research, to name just a few programs.  

It's time Congressman Ryan learns basic arithmetic, while writing budgets, without increasing revenue.  Ryan in charge of America's fiscal policy is a horrific image.  Let's hope his ultra conservative ideas are very quickly thrown into a Halloween night bonfire.

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