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Bill Kennedy: The good, the bad and the ugly

Right Here, Right Now

Posted: July 23, 2009 9:58 p.m.
Updated: July 24, 2009 4:55 a.m.
 

The good
What a glorious celebration of accomplishment we had this past week when we marked the 40th anniversary of our landing on the moon.

For centuries, people were enamored with the moon, wondering if any earthling would ever step foot on it.

It wasn't until May 25, 1961, when President John F. Kennedy appeared before a special joint session of Congress to propose the ambitious goal of sending an American safely to the moon before the end of the decade that the wonder became a real possibility.

A mere eight years later, the audacious goal was achieved, a shining monument to the very best cooperation between government and industry.

That event not only validated the United States' position as the world's technological leader, it also ushered in a period of new national pride and great prosperity, with the unemployment rate dropping from more than 6 percent at the time of Kennedy's proposal to a low of 3.5 percent, despite an expanding labor force, when the momentous landing was finally achieved.

For those of us fortunate enough to bear witness to that historic event and the national euphoria that flowed from one of our greatest achievements of the last century, the accomplishment becomes all the more impressive when one realizes it occurred during a decade in which our federal government spending never exceeded 5 percent of gross domestic product (GDP), the total market value of all goods and services produced in a year.

The bad
Contrast those government spending numbers of the economically blissful 1960s with today's figures.

In the current fiscal year, the federal government will spend nearly 31 percent of the GDP.

That means the federal government controls the spending of 31 cents of every dollar of value in goods and services that is created in this country.

In the 40 years since the lunar landing, the U.S. GDP has tripled, reflecting an average growth of just over 3 percent annually.

Government spending, on the other hand has grown more than 20-fold.

As the government spending has expanded, it has served to chip away at individual self-reliance, making a large portion of our society virtual wards of the state.

Now, President Barack Obama is proposing a universal health care program that many say will take government spending into the stratosphere by adding a trillion-plus dollars more, and this tab will be added to a deficit-financed budget that already promises some $800 billion of stimulus money.

The ugly
So how will the Obama administration pay for delivering on all the promises they are making?

The ugly truth is that they will raise taxes. That is the only way for government to get firm control of the money they need.

The Democrat-led House has passed a bill to the Senate that includes an 8-percent tax on the entire payroll of small businesses that fail to provide health insurance for employees.

They also sent to the Senate a bill proposing a surtax of more than 5 percent on those taxpayers who are already footing 40 percent of the bill for all federal income taxes.

Meanwhile, Obama is supporting a cap-and-trade bill to reduce carbon emissions that is nothing more than a tax that will run up costs on energy production, putting an additional brake on economic growth when we can least afford it.

Other ideas the Obama administration are floating include the possibility of taxing the health benefits that businesses provide their employees and repealing the tax cuts implemented by Bush.

All of these increased-tax initiatives will effectively kill many businesses that are now struggling with the economy.

This ugly offense against business is compounded by the administration's dismal performance with the stimulus package. Following the presidential election, Obama stated that to be effective the stimulus should deliver a "jolt" and one of his advisors, Austan Goolsbee, suggested it needed to be big enough to "startle the thing [economic recession] into submission."

Now, a mere five months after the stimulus package was approved, it is considered a failure across the political spectrum.

To date, only some $60 billion has been spent, and a large proportion of that was only transfers from the federal government to state governments, so the amount that has gotten into the economy is significantly lower and definitely not enough to have a meaningful impact.

The major failing of the president at this time seems to be that he has steadfastly attempted to implement a flawed program that is a perennial favorite of the Democrats - universal health care - while letting languish a program that potentially has just the prescription our ailing economy needs: the stimulus package that promised new jobs and help for families on the verge of losing their homes.

The president would do well to get our national priorities straight.

In these times of double-digit unemployment, it is jobs not health care, that is foremost on everyone's minds. In the 1960s, we had a president who had a righteous sense of what the country needed, had a vision of how to accomplish it and set in motion a series of actions that got the job done.

In the process, we the people only relied on government for opportunity, not support. We could use some leadership like that today ... right here, right now!

Bill Kennedy lives in Valencia and is a principal in Wingspan Business Consulting. He serves the community as Chairman of the Planning Commission, Chairman of the SCV Chamber of Commerce, and member of the following boards: Valley Industrial Association, College of the Canyons Foundation, and Habitat for Humanity SF/SCV. His column reflects his own views and not necessarily those of these organizations or those of The Signal.

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