Economy
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Title: The Money Hole
Source:
HE
URL Source: http://www.humanevents.com/article.php?id=44188
Published: Jun 18, 2011
Author: John Stossel
Post Date: 2011-06-18 09:17:52 by CZ82
Keywords: None
Views: 121855
Comments: 157
The Money Hole by John Stossel, 06/15/2011 America is falling deeper into debt. We're long past the point where drastic action is needed. We're near Greek levels of debt. What's going to happen? Maybe riots -- like we've seen in Greece? We need to make cuts now. Some governors have shown the way. You know about Chris Christie, Scott Walker, Rick Scott, John Kasich, etc. But you probably don't know about Luis Fortuno. Fortuno is governor of Puerto Rico. Two years ago, he fired 17,000 government workers. No state governor did anything like that. He cut spending much more than Walker did in Wisconsin. In return, thousands of union members demonstrated against Fortuno for days. They clashed with police. They called him a fascist Fortuno said he had to make the cuts because Puerto Rico's economy was a mess. "Not just a mess. We didn't have enough money to meet our first payroll." Fortuno's predecessors had grown Puerto Rico's government to the point that the state employed one out of every three workers. By the time he was elected, Puerto Rico was broke. So the new conservative majority, the first in Puerto Rico in 40 years, shrank the government. What was cut? "Everything. I started with my own salary." The protesters said he should raise taxes instead of cutting spending. "Our taxes were as high as they could be, actually much higher than most of the country. So what we've done is the opposite." Fortuno reduced corporate taxes from 35 percent to 25 percent. He reduced individual income taxes. He privatized entire government agencies. "Bring in the private sector," Fortuno said. "They will do a better job. They will do it cheaper." Fortuno's advice for leaders who want to shrink the state: "Do what you need to do quickly, swiftly, like when you take off a Band-Aid. Just do it. And move on to better things." Canada did that years ago. When I think Canada, I think big government. I'm embarrassed that I didn't know that in the mid-'90s, Canada shrank its government. It had to. Its debt level was as bad as ours is today, almost 70 percent of the economy. Canada's finance minister said: "We are in debt up to our eyeballs. That can't be sustained." Economist David Henderson, a Canadian who left Canada for the United States, remembers when The Wall Street Journal called the Canadian dollar "the peso of the north." It was worth just 72 American cents. "Moody's put the Canadian federal debt on a credit watch," Henderson said. The problem, he added, was that Canada had a government safety net that was more like a hammock. "When I was growing up in Canada, people who went on unemployment insurance were said to go in the 'pogie.' You could work as little as eight weeks, taking the rest of the year off." So in 1995 Canadian leaders cut unemployment benefits and other programs. It happened quietly because it was a liberal government, and liberals didn't want to criticize their own. The result was that Canada's debt stopped increasing. As the government ran budget surpluses, the debt went down. "The economy boomed," Henderson said. "Think about what government does. Government wastes most of what it spends, and so just cutting government and having that money in the hands of people means it's going to be used more valuably." Canada fired government workers, but unemployment didn't increase. In fact, it fell from 12 percent to 6 percent. Canadian unemployment is still well below ours. And the Canadian dollar rose from just 72 American cents to $1.02 today. Canada also raised some taxes. But the spending cuts were much bigger, six to one: agriculture was cut 22 percent; fisheries, 27 percent; natural resources, almost 50 percent. "We should learn from Canada's experience that you can cut government substantially," Henderson said. "It is so wasteful. There's so much to cut, without causing much real pain -- not causing pain, but helping your economy grow, helping people become better off." Henderson added, "We need to move more quickly than the Canadians did. Unfortunately, we're moving more slowly than the Canadians did." If we're moving at all. While Canada thrives, we pour more money down the hole.
Poster Comment: Now we know why Obozo went to Puerto Rico, can't have an American "territory" doing just the exact opposite of what the Great Leader is doing.....
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Begin Trace Mode for Comment # 105.
#49. To: CZ82 (#0)
Not only does America soak top income earners like no other country in the world, we also have the highest combined corporate tax rates in the world (Yes, the OCED chart says we're #2, but Japan just sliced 5 points off of their corporate tax rate, so we are now #1.)
Well at least Japan is wising up, took them long enough though.... can't say the same thing for our current "regime", they will never learn.....
Maybe you should move there since in one year they decreased their average life expectancy by a third.
Bullshit. A third? Come on be real.
It's already affecting the birth rate YOUR area. Hint, hint, Japanese cancer treatment centers will be lucrative investments.
You came up with the number of 1/3. What do you base that on? I think it is your imagination.
I just joined your prophecy club. But I bet it's a low ball number. The Japanese will never let the truth out, but it's already affecting birthrates half a world away.
I'm still waiting for him to provide proof that the poor have big screen TVs Xbox pS3s and cell phones purchased with government money.
That says poor, not people receiving government assistance. It doesn't say whether or not appliances are owned by the individual or by the landlord when the housing is rented. Are the vehicles road worthy, how old are they. How many TVs are big screen? Were TVs, answering machines, phones, VCRs, CD players, etc. purchased retail or at garage sales and thrift stores. Were any of those things gifts? Again, the information provided is meaningless in the context of this discussion.
When I upgraded my color televisions over the years - in fine working order - I gave them to those in need.
LF posters would deny you that right. Stone would insist government control what you do with your old TV.
I try to be nice to you folks. But that is something a complete nutcase would say. Why do you say such nonsense?
Why do you say such nonsense? This is what you wrote So you wouldn't object to a bill that if someone gets government assistance those items would be seized to pay back the taxpayers? So government, not Fred, decides whether or not a poor person can have the TV Fred wants to give him. BTW, how is government going to find out the guy has a TV?
#107. To: lucysmom (#105)
What I am saying is that we are pretty much broke as a nation. If people need assistance the means testing should be better. If you have a cell phone, a nice car, cable Tv, Big screen TV. My guess is that you shouldn't get government assistance. If you can afford those items and you are hungry. Sell them and buy some food. Why is is someone elses responsibility always. Why should the government know how much money the rich have? Aren't we supposed to be free from having out personal effects papers etc searched by the govt. The IRS tax code violates that provision of the constitution.
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It shouldn't take a genius to understand why America's economy is in the toilet. Country Combined Central and Provisional Corporate Tax Rate Japan 39.5 United States 39.2 France 34.4 Belgium 34.0 Germany 30.2 Australia 30.0 Mexico 30.0 Spain 30.0 Luxembourg 28.8 New Zealand 28.0 Norway 28.0 Canada 27.6 Italy 27.5 Portugal 26.5 Sweden 26.3 Finland 26.0 United Kingdom 26.0 Austria 25.0 Denmark 25.0 Netherlands 25.0 Korea 24.2 Israel 24.0 Switzerland 21.2 Estonia 21.0 Chile 20.0 Greece 20.0 Iceland 20.0 Slovenia 20.0 Turkey 20.0 Czech Republic 19.0 Hungary 19.0 Poland 19.0 Slovak Republic 19.0 Ireland 12.5
#54. To: jwpegler (#49)
#57. To: CZ82 (#54)
Well at least Japan is wising up, took them long enough though.... can't say the same thing for our current "regime", they will never learn.....
#58. To: mininggold (#57)
#61. To: A K A Stone (#58)
Bullshit. A third? Come on be real.
#63. To: mininggold (#61)
#65. To: A K A Stone (#63)
(Edited)
You came up with the number of 1/3. What do you base that on? I think it is your imagination.
#69. To: mininggold, A K A Stone (#65)
I just joined your prophecy club. But I bet it's a low ball number.
#77. To: lucysmom (#69)
I'm still waiting for him to provide proof that the poor have big screen TVs Xbox pS3s and cell phones
#85. To: jwpegler (#77)
#91. To: lucysmom (#85)
#96. To: Fred Mertz (#91)
When I upgraded my color televisions over the years - in fine working order - I gave them to those in need.
#102. To: lucysmom (#96)
LF posters would deny you that right. Stone would insist government control what you do with your old TV.
#105. To: A K A Stone, Fred Mertz (#102)
I try to be nice to you folks. But that is something a complete nutcase would say.
Replies to Comment # 105.
End Trace Mode for Comment # 105.
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