President Reagan said “In the present crisis, government is not the solution to our problems, government IS the problem.”# The crisis that existed when Reagan took office was very similar to the one we face today.
Large numbers of people unemployed, and even more are dropping out of the workforce. A stagnant economy. A growing federal government.
We solved those problems then by coming together, and by implementing the right ideas. We can do it again, but we must look beyond the current debate in Washington.
I will work with the President, Democrats, Independents and anyone else who wants to get people back to work and alleviate poverty in our country.
That said, we must first understand what caused the mass unemployment and poverty of the Great Recession. The housing bubble and subsequent crash were caused by the Federal Reserve keeping interest rates too low for too long.
Too much government money was given out to too many borrowers who could not afford the payments. Banks were encouraged by government to lend money on houses with no money down. The demand for houses went up, and so did their prices. It was unsustainable.
Millions of people lost their jobs.
If we don't understand the cause of joblessness, we will have trouble fixing it.
As we entered into the Great Recession, Republicans and Democrats misdiagnosed the problem as too little government. So, they gave us more government in the form of bank bailouts and a government stimulus plan.
Nearly a trillion dollars later, we find that government doesn't create jobs very well. It turned out that it cost $400,000 per job created.#
Why? Because government is inherently bad at picking winners and losers.
In the marketplace, most small businesses fail. If government is to send money to certain people to create businesses, they will more often than not pick the wrong people and no jobs will be created.
Think of the half a billion dollars President Obama gave to Solyndra to build solar panels.# Turns out, people didn't want to buy these solar panels and the taxpayer lost that money. Think of the billions spent on the war on poverty over many decades.
It's not that government is inherently stupid…although that's a debatable point. It's that government doesn't get the same signals.
Milton Friedman recognized that when he wrote: “Nobody spends somebody else's money as wisely as they spend their own.”#
When it’s your money, it is spent with a concern no government bureaucrat could ever duplicate.
I have an idea that will empower Americans and give them the opportunity to thrive. My plan is to create Economic Freedom Zones in distressed areas all over the country, including here in Kentucky, which will leave more money in the hands of the people who earned it.#
In Economic Freedom Zones, we’ll cut income and business taxes to a single, flat rate of five percent. We will cut payroll taxes for employers and employees so folks will go home with more money in their paychecks.
Burdensome, job-killing regulations will be removed, and business will expand. More money and more jobs will flow back to the areas that have suffered the most in this economic crisis.
School choice will be expanded. Parents will receive an educational tax credit, because it’s parents, not the government, who know what’s best for their kids.
Over the next ten years, my proposal would leave more than $600 million in distressed areas of Louisville. And more than a billion dollars in Eastern Kentucky.
We need real jobs created in the real world. Not more empty government promises.
Under President Obama, the percentage of people working is at its lowest level since the days of Jimmy Carter.# Roughly 11 million people are unemployed, and millions more have given up looking for work.# Our debt has nearly doubled since President Obama entered office, and is now over 17 trillion dollars.#
Our credit rating has been downgraded. Spending continues at unsustainable levels, and we’re borrowing more than a million dollars per minute.#
Hope and change needs to be more than just a slogan.
Ronald Reagan once said that to love our country is to love our countrymen, and because we love them, we must provide them with the opportunities to make them equal in fact, and not just in theory.#
Economic growth will come when we lower taxes for everyone, especially people who own businesses and create jobs. Lower taxes and less regulation will entice money and jobs to return home.
Americans want opportunity, a chance to work again. I fully believe most Americans hate the trap of government dependency but can’t break free because big government gives them no exit.
I believe a better tomorrow is around the corner if we can see beyond those who entice us with the easy way out.
America has much greatness left in her. We must believe in ourselves, believe in our founding documents, believe in our future, and then we will thrive again.
Editor's Note - the hashtags are footnotes.
1 President Ronald Reagan, Inaugural Addresses of the Presidents of the United States. First Inaugural Address. Jan. 20, 1981.
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