Regain and keep what we had
What we had: One of the highest standards of living in the world. We still have freedom and property rights that are the envy of the world.
How did we get it: After WWII the USA had free enterprise, an intact infrastructure, educated work force, pent up demand and accumulated private savings. The manufacturing edge extended to 1965-1980 depending on the industry. The new growing tech and pharmaceutical industries replaced some of the manufacturing jobs in the textile and low level assembly operations (creative destruction).
What went wrong: The Korean Peace Action (part of the hot cold war) started the drain of resources. The Vietnam War was a huge drain of blood and money, and the dissension generated in our society has never healed. We as a government embraced the caring and fairness doctrine of equal outcomes (redistribution for 40 to 50 percent of the population). We increased the consumer spending on borrowed money during the 2000’s by the private sector (homes and cars) and the federal government on entitlement programs. The living on borrowed money by the private sector ended when the housing market collapsed and the economy went sour.
Future liberal path: Continue the government spending (Keynesian economics).The current rate is $1.2 trillion above revenue to prop up the economy. Keynesian economics didn’t work during the Great Depression; the unemployment rate was still around 18 to 20 percent in 1938 to 1940. WWII ended the Great Depression. It has not worked 2009-2012 either. The unemployment, under-employment and stopped-looking rate is 14 to 16 percent.
Future conservative path: Rewrite the tax code to broaden the tax base with reduced marginal rates to encourage free enterprise, adjust the entitlement promises (increased personal incentives and responsibly), along with reduced regulations. The resulting growth in GDP will reduce the deficient.
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