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It is abundantly clear that both parties are unrealistic about what it will take to fully address our nation’s economic difficulties.  Republicans cling to the false belief that an unprecedented austerity program will somehow not precipitate economic contraction while the Democratic fallacy of significant GDP growth and modest tax increases on only the rich magically solving the future entitlement liability shortfalls is no less unreasonable.  We need leaders who will work together, call the nation to shared sacrifice, put party ideology aside, and offer solutions that address the structural problems with our economy.

We face numerous immediate challenges: high unemployment, enormous government debt and deficits at the federal and state levels, a widening wealth gap and decline of class mobility, the disappearance of the middle class, and the prospect of a double-dip recession.  However, to fully address these challenges, we need a combination of short-term and long-term solutions that require our nation’s leaders to be pragmatic and consider enacting policies that might anger their political bases.  Below are some examples of policies that can help address the nation’s economic woes; I’m hoping to see other users leave their own suggestions in the comments.

On the revenue side, we should both raise revenue and ensure that tax increases do not stifle economic growth.  We should raise the estate tax and allow the Bush tax cuts to expire for all tax brackets, implement Pigovian taxes on carbon emissions and foods that contribute to our nation’s obesity epidemic, phase out the mortgage interest deduction, and increase normal capital gains and dividend taxes.  Tax loopholes and oil and agricultural subsidies should be curtailed or eliminated.  However, to counteract the negative impact these additional taxes would have on economic growth, some of the incremental revenue should be used to fund a domestic alternative energy infrastructure, create a capital gains tax exemption on direct investments in small or high-growth businesses, expand the SBA loan program to ensure businesses have access to the credit they need to expand, and reduce the payroll tax to make it easier for companies to hire domestic workers.  We should also eliminate or modify the accredited investor rule for investments in small, private, businesses to increase the availability of growth capital.

On the entitlements side, we need to raise the retirement age and reduce benefits for future Social Security and Medicare recipients and ensure that current beneficiaries share the pain with phased in reductions in benefits.  Medicare should be empowered to negotiate with drug companies as we can no longer afford to subsidize the entire world’s access to new and innovative treatments.  To cope with the expected increase in demand for healthcare services, new Medical, Nursing, and Allied Healthcare education programs should be funded out of some of the savings from entitlement reductions.

Discretionary spending should not be immune from cuts.  The dramatic expansion of defense spending since 9/11 should be reexamined as the wars in Afghanistan and Iraq are wound down.  Other programs’ budgets should be thoroughly examined by a new department, which has the express purpose of finding cost savings and sharing cost-saving best practices between agencies.

With some of the funds generated from tax increases and entitlement and discretionary spending reductions, we should fund programs designed to address the unemployment rate and restore the American Dream.  Part of the problem is that there is a gap between the skills required by industry and those possessed by many of those who are unemployed or underemployed.  Education grants and loans should be increased, but directed only to students receiving degrees that are likely to result in gainful employment in their field of study—science, engineering, technology, healthcare, etc.  That should improve loan repayment rates and reduce the cost of such programs to the government while ensuring that students do not face undue hardship from loans they are unable to repay.  In addition, funding should be provided to companies and non-profits that aim to disrupt the education market with high-quality, low-cost, training that could reduce the cost of helping displaced workers prepare for new careers in industries where there is demand for skilled workers.

Only by coming together, attacking our economic problems from all sides, and abandoning party dogma can we fix the structural problems with our economy and ensure our domestic economic security.

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Comment Preferences

  •  The problem is, voters don't want the truth (0+ / 0-)

    Most people want to hear pretty lies.  This advantages Republicans because they have legions of PR people whose profession is built on developing an expertise in lying.  

    I think I saw this first in about 1983.  A true environmentalist had gotten elected.  He pissed off the development community so much that there were hundreds of thousands of dollars out in search of a candidate to unseat him with.

    That candidate ripped off the pro-environment speech lines that the real environmentalist had used and won the election, as an anti-environmental elected office holder.  

    This has happened time and time again.  People who do not mind lying tend to be able to win, unless the candidate who is genuine is much smarter about political maneuvering.  

    A lot of people who run for office are not.  A lot of voters are not smart about dissecting the real versus the unreal.  The media is downright stupid about this.  

    hope that the idiots who have no constructive and creative solutions but only look to tear down will not win the day.

    by Stuart Heady on Sun Aug 07, 2011 at 04:41:55 PM PDT

  •  Neoliberal crap...take your shared sacrifice (2+ / 0-)
    Recommended by:
    kck, Eric K

    and shove it.

    ....the Democratic fallacy of significant GDP growth and modest tax increases on only the rich magically solving the future entitlement liability shortfalls is no less unreasonable.  We need leaders who will work together, call the nation to shared sacrifice, put party ideology aside, and offer solutions that address the structural problems with our economy.

    Corporate taxes for the biggest companies have plunged over teh past 50 years. The tax brackets for the top 1% and the top 0.1% have plunged drastically. And the disparity of wealth has shot up as those taxes have dropped.

    So please, before you start raising taxes on the average person, make billionaires pay back some of what they have extracted from America.

    look for my eSci diary series Thursday evening. "It's the planet, stupid."

    by FishOutofWater on Sun Aug 07, 2011 at 04:48:45 PM PDT

  •  I am ok with many of your suggestions. (1+ / 0-)
    Recommended by:
    monkeybox

    A couple I am just so against:

     - Raising the retirement age. Social Security is not only solvent but will remain so for up to near 2030. Take the cap off of earnings at $106,000, good to go. The French objected to raising retirement from 60 to 62.  So many who are the hardest workers would be left the longest without retirement. Many professions and careers, render people ready to retire much earlier than even our current age limits allow. Bodies wear out, and break down.

     - Medicare reductions.  Expand Medicare, and reduce the fragmented medical delivery system and we will see astonishing savings. This is before we begin looking at things like having too many gamma knife machines in several local hospitals.  Yes to negotiating for medications as is done in most other coherent nations.

     - Mortgage relief. Where are all those foreclosed upon families going? How many are double and tripled up in family and friend circles?

    Science is hell bent on consensus. Dr. Michael Crichton said “Let’s be clear: The work of science has nothing to do with consensus... which is the business of politics. Science, on the contrary, requires only one investigator who happens to be right,”

    by Regina in a Sears Kit House on Sun Aug 07, 2011 at 04:53:26 PM PDT

  •  How Do We Get Results (0+ / 0-)

    we need to have huge protests like in Israel to get the gov't to notice.  We need to get people involved in rallying support. Sort of a Liberal based Tea Party movement.  When I read about all these celebrities speaking out on an issue, ie Matt Damon on education, Lady GaGa on LGBT, I wish someone would use their fame to start a protest.  

    We could have a huge march on Wall St or Washington DC.  I'm sure we all would help but how do we begin.  It's so frustrating to see the Teabaggers get all the attention

    www.johnboehnerwheresmyjob.com

    by Renie57 on Sun Aug 07, 2011 at 05:04:33 PM PDT

  •  Skills mismatch isn't causing high unemployment (3+ / 0-)
    Recommended by:
    monkeybox, Clem Yeobright, kck
    Part of the problem is that there is a gap between the skills required by industry and those possessed by many of those who are unemployed or underemployed.

    Unemployment cuts across sectors, reflecting a broad under use of labor associated with a general lack of demand for products.

    look for my eSci diary series Thursday evening. "It's the planet, stupid."

    by FishOutofWater on Sun Aug 07, 2011 at 05:08:52 PM PDT

    •  FOOW ... You are soooo f-ing wrong on that. (1+ / 0-)
      Recommended by:
      FishOutofWater

      If everyone had Jamie Dimon's skill set, we could all be rich, have govt. bail us out when we fuck up, whine when someone asks us to man up just a little, and have an entire mainstream party dedicated to protecting us from having to "go Gault."

      In fact, if we only privatized the public school system by replacing it with a voucher system and prayer in school children would acquire that skill set practically automatically.

      dkmich--"With Democrats like Obama, who needs Republicans." Mitch McConnell--"With Republicans like us, who needs Obama! LMFAO!!!"

      by monkeybox on Sun Aug 07, 2011 at 05:26:28 PM PDT

      [ Parent ]

  •  Respectfully, bullshit. (3+ / 0-)

    "Only by ... " is where you lose credibility.

    You happen to prefer the Beltway's mish-mash of raising the eligibility age for Medicare and a variety of measures that shift both cost and risk to vulnerable people on the cost-containment side.

    There are alternatives and until you acknowledge that, this "conversation" or "dialogue" is more about striking a pose than anything else.

    IMO.

    dkmich--"With Democrats like Obama, who needs Republicans." Mitch McConnell--"With Republicans like us, who needs Obama! LMFAO!!!"

    by monkeybox on Sun Aug 07, 2011 at 05:12:54 PM PDT

    •  Solutions Orientation (0+ / 0-)

      All I want is for both sides to adopt a solutions-oriented mindset.  The issue is too important to allow Democrats to assume unreasonable GDP growth rates just the same as it is too important to let the Republicans' "no revenue increases" position to stand.

      We need to work together to ensure that there is enough of a pie left to divide up before making calls for class warfare that only address how whatever pie is left is to be divided.  This is not a zero sum game and, if we raise revenues too much or too haphazardly in order to support your otherwise noble purposes, there may be unintended consequences (like economic contraction--less of a pie).

      I believe the wealthy should bear a disproportionate share of the burden but I also believe there does have to be a shared sacrifice.  We also need innovative initiatives to encourage economic growth.

      •  This is why you're dangerous. (0+ / 0-)

        You seem to be characterizing modest tax increases for very wealthy people as "sacrifice."  It's not.

        Feeling "oppressed" or "burdened" by chipping in a little extra so elders in nursing homes don't get so many bed sores is a sort of self-inflicted mental illness that we'd rather not participate in.

        Class warfare is what already exists.  Nobody here is calling for anything more than self-defense.  It's dishonest and destructive (not constructive) to begin in such a one-sided, imbalanced way.

        It's nice that you've kind of reverted to what used to be the mainstream Republican position:  "we all want the same things, we can use innovative market-based solutions to achieve them, etc."  But, as it turned out ... when Democrats tried that, Republicans revealed that those were, for them, phony positions, phony values, phony promises and offers.  Worse, as it turned out, Republicans have shown what can happen when one side is willing to compromise and the other isn't -- and the unreasonable side isn't held accountable by anybody.

        Maybe when the "center" and the "right" practice what they preach and build a little credibility with the left we can talk.  

        dkmich--"With Democrats like Obama, who needs Republicans." Mitch McConnell--"With Republicans like us, who needs Obama! LMFAO!!!"

        by monkeybox on Sun Aug 07, 2011 at 07:20:50 PM PDT

        [ Parent ]

  •  "future entitlement liability shortfalls" (3+ / 0-)
    Recommended by:
    shaggies2009, Clem Yeobright, mdmslle

    I stopped reading at this point.

    Right-wing claptrap.

  •  This loser DLC crap is always served up sans data (5+ / 0-)
    On the entitlements side, we need to raise the retirement age and reduce benefits for future Social Security and Medicare recipients and ensure that current beneficiaries share the pain with phased in reductions in benefits.
    There's no financial case for these stale centrist platitudes.

    Eliminate the Bush tax cuts Eliminate Afghan and Iraq wars Do these things first before considering any cuts

    by kck on Sun Aug 07, 2011 at 05:26:29 PM PDT

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