A year ago, I blogged about Indiana’s governor, Mitch Daniels and the coming “reality check” for state budgets. He said then: “State governments will soon have to choose between a major downsizing or consigning themselves to permanent decline. Wishing for an improbably huge boom while chasing your own tail through self-destructive taxes won’t prove much of a strategy.”
Today in the Wall Street Journal, Governor Daniels is even more pointed. He calls for a “time-limited, emergency growth program aimed at triggering new private investment” and says that should be a primary goal of the next Congress.
He clearly outlines where we are nationally and it’s not a pretty picture – anemic growth, the failure of trickle-down government spending, job creation being stalled by big-government policies like Obamacare and government recovery projections that rely on rates of growth we have not seen in 50 years. Those rates, by the way, only pull us back from “catastrophe” to “disaster”, and still allows debt to rise to almost 90% of GDP. It’s not a real “fix” – only a vibrant, extended boom can pull us back from true catastrophe – and banking on that is like depending on the lottery for your retirement plan.
Governor Daniels suggests:
*A payroll tax holiday of the Social Security tax for one year, offset twice over through a combination of the following policies:
*Impoundment power - once again authorizing the president to SPEND LESS than Congress appropriates
*Recall federal funds – rescind unspent TARP funds and hundreds of billions in unspent funds from previous appropriation bills
*Federal hiring and pay freeze – better yet, a 10% cut, then freeze
*A “freedom window” for energy companies that would allow them to proceed immediately with new job creation
*Accelerated or full expensing of business investment, something that is rumored to be under discussion right now.
He shares the following story:
Ronald Reagan enjoyed telling of the elderly Blitz victim rescued from her demolished London flat in World War II. A fireman found a bottle of brandy under the ruins of her staircase and offered her a nip for her pain. “Leave it right there,” the matron ordered. “That’s for emergencies.”
Governor Daniels concludes:
With or without Democratic help, Republicans should step forward with these or superior ideas. A stagnant, impoverished America will not be a greener or safer or fairer place. Grown-ups make trade-offs. Pass the brandy, then let’s get busy.