McCain and Economic Straight-Talk
By Jeff Lukens
Talking tough on terrorism will not be enough for
Senator John McCain to sustain his candidacy. McCain fashions himself as
a maverick, or should we say liberal, on many issues. Liberals, however,
long ago relinquished the intellectual agenda to the Right. Now they
frequently react to conservative ideas on the economy, the military, the
role of religion, and how big the federal government should be. Mitt
Romney is a better-suited candidate to address economic issues, but for
better or for worse, John McCain is now our nominee. As such, McCain
should take the lead in advocating policies for the economic well being
of our country.
For starters, we could use some straight-talk
that Social Security, Medicare, and Medicaid require an overhaul. The
gap between the entitlements promised to baby boomers and the tax
revenue to pay for them is estimated in trillions of dollars. Providing
the full benefits will probably be impossible.
The grievance and nanny-state programs Democrats
have cultivated the past fifty years is beyond old but is still being
sold to us in many variations. Universal healthcare is the latest twist.
But it is all bunk. Only low taxes, spending discipline and market
solutions unhindered by Washington red tape can provide the answers to
the economic problems we face. The dynamics of free enterprise by
American people will do the rest.
The United States is basically a conservative
nation, especially when compared with those in Western Europe. Over the
years, the rugged individualism of the American people has fueled
unparalleled growth. We were conceived as a conservative culture some
230 years ago, and changed to one that experimented with socialist ideas
from the 1930s through the 1970s. With much of the civil rights agenda
and the large-scale expansion of the federal government under LBJ
complete, liberalism ran out of steam.
The impact of budget deficits, inflation, and
high taxes had taken their toll in the 1970s. The growth of the federal
government was the main reason the US economy stalled. By 1979, Senator
Pat Moynihan, Democrat from New York, said that conservatives had won
the war of ideas. The next year, Ronald Reagan was elected president,
and ever since the political winds of our country have been shifting
Now more than ever, we need low taxes and
spending discipline in government. Not only are we unable to pay for
entitlements, the 2003 tax cuts will expire soon, which will inhibit
further growth. The stimulus relief package soon to become law will only
widen the deficit, not reduce it. To his credit, McCain has opposed
wasteful congressional earmarks for a long time.
We need a sound strategy for energy independence
as well. We export our dollars overseas to import oil that we refuse to
drill for ourselves. Conservation is always a good thing, but economic
growth requires fuel that, at present, only oil provides. Alternative
energy sources will take decades to become economically viable. For now,
we need to drill in ANWR, in the Gulf, and on the continental shelf.
McCain has opposed energy independence measures
every step of the way and has bought into the junk-science hoax of
global warming. On this score, he is 180 degrees out of phase with what
we need to grow the economy. It seems that drinking the environmental
Kool-Aid on this matter is more important to him than supporting the
needs of the American people.
As the trade deficit grows, the value of our
currency is reduced. Moreover, the trade deficit produces excess US
Dollars in the hands of ever more Chinese, Saudis and other foreigners.
US debt in the hands of foreign governments is now about
25% of the total. Currently, China holds over $1 trillion in dollar
denominated assets (of which $330 billion are US Treasury notes).
As the Fed lowers rates to keep our economy going, the return for those
foreign investors is lowered as well. Eventually they will look
elsewhere for higher returns.
Once foreign investors start shunning our
T-notes, the Fed may then have to raise rates again and stall the
economy to keep them from divesting US debt. A financial crisis could be
upon us. The only way out of this mess is by balanced trade, balanced
budgets, and more productivity by our workforce.
On many fronts, we are literally in a race for
our financial lives. The high-tech age is requiring ever more people to
have a high degree of skill in some technical vocation. Gone is the time
when folks could make a good living as unskilled laborers. Lacking such
skills, economic conditions for many people will get even worse,
especially for the poorly educated underclass.
The next president must dare to be honest about
the new economic world order. In a flat-world economy, he or she must
advocate ways to generate wealth for working people. Economic reality
has moved beyond class struggle and race relations in America. Does
anyone think the Chinese and other Asian countries are standing still
while our country falls further behind in the productivity race? The
loss in jobs and lowered standard of living for many people is already
The economy will likely be the biggest challenge
faced by the next president. As can be expected, Democrats have been
totally void of substance so far in the campaign, except for advocating
more socialism. The way ahead does not lie in nostalgia for more Great
Society programs. If the next president is John McCain, he will need to
give this extremely complex issue the attention it deserves.
We must never lose sight that conservative
principles have been the reason for America's exceptionalism. While
Republican prospects are uncertain for November, we must still define
the party in a way that reflects conservatism and sound economics. John
McCain is the leader of our party, and whether we win or lose, we need
him to promote low taxes, balanced budgets and pro-growth solutions that
will unleash the productivity of the American people.