I’ve tried every way to stop the borrowing and pay for government. I thought I had run out of gas until this morning. Now come my friends, Alan Simpson and Erskine Bowles, again on a 10-year plan, which is nonsense.
Then there is E.J. Dionne Jr. in The Washington Post, writing: “Why the Deficit Obsession?” If Simpson and Bowles can keep trying on 10-year plans for later Congresses to do the cutting that never happens, I can keep trying for a Value Added Tax to replace the Corporate Income Tax. Dionne should be told that there is no deficit obsession or austerity in spending. Spending has continued now for 12 years without paying for the spending, and during that 12 years, we have stimulated the economy $10 trillion. Another $850 billion stimulation estimated by the CBO this year has the economy limping.
Every mayor and every governor pays for government year to year — every household likewise. But not Washington politicians.
So the American people are not obsessed by deficits; they’re obsessed by the penalty that’s caused by not paying — interest costs. The CBO estimates that the interest cost will be $445 billion this fiscal year. That’s with low interest rates. If the economy recovers and we have borrowing at 4 percent interest rates, the $445 billion waste will become a trillion-dollar waste, or spent for nothing.
The American people are prudent. They are used to paying their bills. Now in this 13th year of the president and Congress refusing to compete in globalization; refusing to make the economy attractive for private investment; playing the stock market as the economy is off-shored, the American people are obsessed with this sorry federal government.
I spent three years overseas in combat in World War II, 10 years in the state Legislature, four years as South Carolina’s governor, two years on the Hoover Commission investigating our intelligence activities, four years on the Intergovernmental Relations Advisory Commission and 38 years in the U.S. Senate — a total of 61 years of proud government service. During the 38 years in the Senate, I travelled the world, and everybody was proud of the United States.
Now, with Bush and Obama’s War on Terror, drone killing and GIs stationed the world around, we puff and blow like a world superpower when with little North Korea as a nuclear threat there’s no such military superpower.
But China is intent on becoming an economic world power. It knows that when the United Nations went about investigating human rights in China after Tiananmen Square, China used its economic influence to prevent a hearing on the resolution. Again, when China withheld rare earth supplies after Japan seized the Chinese ship captain, Japan promptly returned the ship captain. China takes our technology, alters it slightly and patents it for the product to become an article in trade.
When Corporate America comes home in two or three years, it will have nothing to produce. Iran takes the China currency for its oil. Australia takes the China currency for its iron ore. China backs its currency with the gold standard. We back ours with a printing machine. China is replacing the dollar with its RMB or Yuan.
China competes in globalization while we lecture, drone kill and look to spread democracy in Syria when nobody in Syria wants democracy.
Politics and public service is my profession — an honorable one. But the federal government is an embarrassment.
We can start in the right direction by replacing the 35 percent Corporate Tax with a 7 percent VAT; pay for government in two years rather than 10 — or never; start rebuilding our economy and start competing in globalization with China.
China is about to take us to the cleaners.
Ernest F. “Fritz” Hollings, a Democrat, served as governor of South Carolina from 1959-63 and in the U.S. Senate from 1966-2005.