TJP

Today's GOP argument is that spending and tax increases by the Obama administration are bad for the country. Their argument, however, is disingenuous and purposely for political gain. It is also partly deceptive, because the Obama administration has not increased taxes.

They are correct in arguing that government spending increases the deficit. However, each government dollar spent to improve employment during the current economic slump, increases the deficit by less than a dollar.

The reason is because the increase in government spending causes income, as well as, tax revenue to increase. Thus, the increase in tax revenue attenuates a portion of deficit due to increased government spending.

If the administration increased taxes, it would cause income level to fall. However, when it increases government spending and transfer payments it causes income levels to increase. Therefore, in periods of insufficient private consumption and investment spending, the government has to be the spender of last resort and the Federal Reserve has to expand currency in circulation. The goal is to generate enough aggregate demand to attain full employment. The components of aggregate demand are consumption, investment, government spending, and net exports.

When the economy is in a recession, tax revenues and the government budget decline; the budget often becomes negative. However, when economic activities are on the upswing, the government budget becomes positive.

Nonetheless, focusing on government deficit is not a solution. Government deficit is a result of insufficient economic activities due to internal or external shock to the economic system.

Politicians must focus on achieving full employment; they must understand and articulate to the public the appropriate fiscal and monetary policies required to achieve full employment.

The trophy for political empowerment should be contingent on delivering full employment, an increasing national income at about 6 percent per year, and providing an environment for positive net exports. Net exports are exports minus imports.

The platform of any viable political party should to akin to a balanced score card (BSC), whereby a clear mission and vision for the country is codified. The BSC is a potential mechanism for building administrative capacity and government accountability into the current broken political system.

Constituents should join competent non-partisan public groups committed to economic growth, political and educational transformation to develop shared goals that will facilitate the revitalization of government and the nation. These non-partisan groups would examine the needs of the country, recommend appropriate solutions, and monitor progress of the shared public goals on behalf of citizens.

Given the adversarial political system in Washington DC, it is, therefore, essential to expeditiously revitalize and improve government at all levels.

In the absence of expeditious improvements and revitalization, it is likely that developmental states will surpass the United States economically and intellectually within the next 10 years.

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