|Source:The White House- President Barack H. Obama (Democrat, Illinois) talking about the debt deal that was reached with Congress.|
"President Obama delivers a statement in the Rose Garden of the White House on the debt compromise passed by both houses of Congress to reduce the deficit and avert a default that would have devastated our economy. August 2, 2011."
From The White House
Again, I think people across the political spectrum all the way on the Far-Right all the way over to the Far- Left agree this isn't a perfect deal. (Maybe the only thing they agree on.) It's exactly what a compromise looks like, both sides gave in. Republicans got their budget cuts but they also had to cut defense and weren't able to get entitlement reform. Democrats got defense cuts, an eighteen month extension in the debt ceiling and were able to prevent entitlement cuts. But they weren't able to close tax loopholes or get tax hikes on the wealthy.
But this is just what round one of what deficit reduction looks like. What I would like to see in round two is tax hikes on the wealthy, closing tax loopholes, and overall tax reform that broadens the base and lowers rates. But none of the reforms will make a damn bit of difference if we don't get the economy growing again where we have enough economic and job growth to bring down our unemployment rate by putting people to work.
For America to get back to strong economic growth, we need to be growing at around 4% GDP and to do that we should first not make the problem worst then it already is which is already happening. With the FAA Shutdown we need to put those people back to work and building more infrastructure at airports and other things. That represents around 100,000 well paid six figure jobs that we can't afford to lose in this economy.
Another way to improve the economy is with free trade, there are three trade deals stuck in Congress right now that neither the House or Senate has acted on. Which is a bipartisan problem that the President is probably going to have to resolve and he can't to that by waiting too late in the fourth quarter before getting in the game. This problem is around TAA (or Trade Adjustment Assistance) which helps people who were laid off because their job was sent oversees and is not coming back. And it helps them get retrained to get a job in another field.
The President and Congressional Democrats are in favor of TAA and Congressional Republicans are against it because they see it as Welfare or something and believe is too expensive. What the President and Congress should really be doing is rebuilding our manufacturing and construction industries, not by running them obviously but creating incentives for them to produce. And turn the phrase: "Make it in America" into an economic policy and not just a phrase.
A National Infrastructure Bank which already has bipartisan support in the Senate and has the President behind it, would be a great first step in doing this. A National Infrastructure Bank would essentially be an independent non-profit organization that would go around the country and to see where we need infrastructure repairs and expansion. roads, bridges, airports, schools, waterways and would raise the money in the private sector to accomplish this with investors. And then hire company's to do the work and they would get the employees to do the work.
The beauty of a National Infrastructure Bank is that it would be self-financed, just needing 10B$ in startup capital it could get from the Small Business Administration or something. And then it would also be independent of the Federal Government, they wouldn't have to run it. Liberal Democratic Senator John Kerry and and Conservative Republican Senator Kay Bailey Hutchison (the Ranking Member on the Commerce Transportation Committee) already have a bipartisan bill to accomplish this.
The debt deal is a solid not great first step in getting our debt and deficit under control by starting to pay it down, but it's just round one. Round two should be about entitlement reform, tax reform, and finally getting the economy moving again and putting people back to work. Which would be easiest and best way to pay down our debt and deficit.