Economic Simulus Plan and Intergenerational Equity
Congressman, Senators, and the President are elected by the current generation of U.S. voters over the age of 18. Although they represent the majority of voters in their districts, states, and across the nation, these elected officials have no moral authority to make fiscal and other policy decisions that burden future generations of Americans (that cannot vote in today's elections) with an unsustainable tax burden required to service the accumulation of multi-trillion dollar deficits, and tens of trillions of dollars in unfunded off balance sheet obligations. Furthermore, the costly war to secure oil supplies in Iraq, and the war on terrorism stemming from 911 are no excuse for our soaring national debt, and the current economic malaise.
Elected officials must find the political will to balance the federal budget over the next business cycle, and control runaway entitlement spending. Otherwise, in the not too distant future, the U.S. Dollar will surrender its role as the Reserve Currency, and U.S. interest rates and inflation will soar as foreign creditors flee treasury and other U.S. Dollar denominated securities and assets. As a result, the worst Recession and financial crisis in the post war period, that is the unintended consequence of the Federal Reserve Bank accommodating endless deficit spending by the Federal Government and American Consumers, may be followed by a decade of Stagflation.
The proposed $825 billion economic stimulus plan should be limited to investments in energy, educational, and transportation infrastructure projects that can provide quantifiable benefits to both the current generation of voters, as well as future generations of consumers and businesses. A nationwide network of natural gas refueling stations for the interstate trucking industry and a mass conversion of Heavy Duty Trucks and Rail from diesel to compressed natural gas would be excellent candidates for such a project. Any middle class tax cuts in the stimulus package should be permanent so as to reduce the relative cost of labor in the U.S. However, after two years, the lost revenue should be fully offset and supplemented by a "National Security Fee" on petroleum products, a "Carbon Tax" of $30 per ton on greenhouse gas emissions, and a new "Wellness Tax" on junk food, cigarettes, and industrial pollution of the air, fresh water, and oceans. These new sin and pollution taxes will shift the tax burden onto activities that are shortening the lives of Americans, driving up health care costs, damaging our planet, and weakening the security of the nation, while reducing the tax burden on profits and domestic labor, which drive the economic engine of progress. In addition, those industries, (e.g., financial, health care, and transportation, etc.), that require federal regulation should pay the cost of sustaining a robust and efficient regulatory regime.
If the federal government makes a credible commitment to sustaining its revenue sources as the economy recovers, than consumers and business will respond by making better investment and consumption decisions today. For example, consumers will buy more efficient cars and trucks even in the face of declining oil prices, and businesses will pass on inflationary hedges, and anticipate future taxes on emissions and junk food by investing in clean technologies, and offering consumers more nutritious products. Finally, a sharp future swing between the current deflationary trend and future inflation will be avoided.
Elected officials must find the political will to balance the federal budget over the next business cycle, and control runaway entitlement spending. Otherwise, in the not too distant future, the U.S. Dollar will surrender its role as the Reserve Currency, and U.S. interest rates and inflation will soar as foreign creditors flee treasury and other U.S. Dollar denominated securities and assets. As a result, the worst Recession and financial crisis in the post war period, that is the unintended consequence of the Federal Reserve Bank accommodating endless deficit spending by the Federal Government and American Consumers, may be followed by a decade of Stagflation.
The proposed $825 billion economic stimulus plan should be limited to investments in energy, educational, and transportation infrastructure projects that can provide quantifiable benefits to both the current generation of voters, as well as future generations of consumers and businesses. A nationwide network of natural gas refueling stations for the interstate trucking industry and a mass conversion of Heavy Duty Trucks and Rail from diesel to compressed natural gas would be excellent candidates for such a project. Any middle class tax cuts in the stimulus package should be permanent so as to reduce the relative cost of labor in the U.S. However, after two years, the lost revenue should be fully offset and supplemented by a "National Security Fee" on petroleum products, a "Carbon Tax" of $30 per ton on greenhouse gas emissions, and a new "Wellness Tax" on junk food, cigarettes, and industrial pollution of the air, fresh water, and oceans. These new sin and pollution taxes will shift the tax burden onto activities that are shortening the lives of Americans, driving up health care costs, damaging our planet, and weakening the security of the nation, while reducing the tax burden on profits and domestic labor, which drive the economic engine of progress. In addition, those industries, (e.g., financial, health care, and transportation, etc.), that require federal regulation should pay the cost of sustaining a robust and efficient regulatory regime.
If the federal government makes a credible commitment to sustaining its revenue sources as the economy recovers, than consumers and business will respond by making better investment and consumption decisions today. For example, consumers will buy more efficient cars and trucks even in the face of declining oil prices, and businesses will pass on inflationary hedges, and anticipate future taxes on emissions and junk food by investing in clean technologies, and offering consumers more nutritious products. Finally, a sharp future swing between the current deflationary trend and future inflation will be avoided.
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