Wednesday, October 20, 2010

Let's Be More Like Britain

We have a $55.6 billion deficit on our hands because of the  stimulus spending during the recession to so call stimulate our economy even though I doubt very much that the stimulus has helped that much to our  recovery.

Now the fight will be on to find solutions to slaying the deficit between the Conservatives and the Libs. The Conservatives have already indicated the corporate tax cuts which is to take affect in January will go ahead. That will leave more money in the  companies' coffers to invest in more capital, hire more employees etc.

The Libs on the other hand want to cancel the corporate tax cuts in order to pay for their social programs like their home care plan. which would be a job killer.  Other than that the deficit reduction plans from both parties are much alike   So it's basically tax and spend Liberals.  There are not very bold intiatives, no big spending cuts, or reduction of the size of government  from either party.  We need to further, much further to slash that deficit and pay down the debt than what either party are proposing.

So why don't we take a page out the the British deficit reduction book?  They are much bolder in their plan.  They plan to slash spending and raise the retirement age from 65 to 66yrs.
They are reducing the size of government by cutting upwards of 490,000 public servants positions over the next four years.
LONDON - Britain said on Wednesday it would cut half a million public sector jobs, raise the retirement age and slash the welfare state as part of the biggest spending cuts in a generation.
This is what we should be doing.  Yeah, some wouldn't like it, it would hurt for a while but it would be good for the country in the long run because a smaller government saves the taxpayer a bundle leaving more money in our pockets.   More money in our pockets leaves us to spend, invest and innovate.  Business in the private sector with more money creates jobs.  That in turn brings in more government revenue believe it or not. t's just good for everyone.

BTW. Has anyone ever heard of the forgotten depression of 1920?  Didn't think so. This is how the US got out of that one very quickly and back into prosperity.
The economic situation in 1920 was grim. By that year unemployment had jumped from 4 percent to nearly 12 percent, and GNP declined 17 percent. No wonder, then, that Secretary of Commerce Herbert Hoover — falsely characterized as a supporter of laissez-faire economics — urged President Harding to consider an array of interventions to turn the economy around. Hoover was ignored.
Instead of "fiscal stimulus," Harding cut the government’s budget nearly in half between 1920 and 1922. The rest of Harding’s approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third. The Federal Reserve’s activity, moreover, was hardly noticeable. As one economic historian puts it, "Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction."2 By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and was only 2.4 percent by 1923.
I encourage you to take the time to watch this video.  It's over 40 minutes long but very informative.  It tells the story of the forgotten 1920's depression.

So we  should have learned something from all of this by now.  Have we? I don't know but what all this has proven  is that big government spending and socialism doesn't work. The bills eventually come due and have to be paid.  Only common sense, true conservatism, personal freedom and responsibility.  The ability to create and invent, and the freedom for business to make a profit. That is what works!

So let's try true conservatism for a change. Let's live within our means. Cut spending, aggressively cut taxes, reduce the size of government, allow for personal freedom and responsiblity and that will spark inovation and creativity then prosperity will come back. It's just as simple as government getting out of the way.

The British  train is finally on the right track. The Canadian train needs catch up and  get on that track before we become a train wreck.  It's just as simple as government getting out of the way.  Not just the federal government but governments at all levels must take the same course.  What are we waiting for?   Let's be more like Britain!