Recent polls suggest that as many as 75% of Americans still view the economy as the most important topic in the coming election. Over the last month, we’ve discussed gas prices, unemployment and the deficit and entitlement programs how they relate to the election. The brief summary is that nothing has changed to diminish the significance of these discussions, which also implies that nothing has been done to formulate a solution.
The move towards higher gas prices is always the easiest to discuss. It’s common ground we can share with nearly everyone. Much of the run up has been blamed on Iranian oil being taken off of the market due to EU and U.S. sanctions on Iran. This assumes incorrectly, that oil is being taken off of the world market and is creating a global shortage. The truth is actually quite the opposite. Iran has continued to pump oil as fast as it can and has been selling it to India and China who are both using this captive market to build their own strategic reserves. The increased output by Saudi Arabia is therefore placing more oil on the global market than before the Iran sanctions were enacted.
Here are a few gas facts to keep in mind. The current consensus is that gas prices need to move above $5.30 per gallon to force lifestyle adjustment upon the average American. Natural gas produces the energy equivalent at $1.60 per gallon. Gas prices in November of 2008 were around $2.00 per gallon. Polls show that the American people believe the President has some control over gas prices and are unhappy with the way he’s handled domestic energy policy.
The recent unemployment report remained unchanged at 8.3%. We’ve already discussed some of the hidden data within the report structure so, we’ll move on to some practical application in the employment and tax base structure. Small businesses must be given a chance. They represent 44% of total payroll taxes and generate 65% of new jobs. The federal government needs to repeal or modify policies like the new healthcare package and the payroll tax. State and local governments also need to find ways to foster new start ups.
Practically speaking, these policies are easier to enact in areas of population growth due to the growing tax base new residents will provide. The tougher question is, “How do rustbelt cities and towns reinvent themselves?” The answer, I believe is twofold. First of all, there has to be an acceptance by the residents that what used to make the city work is no longer a viable option. The auto industry isn’t going to rematerialize in a former version of itself. Therefore, towns like Cleveland have pushed hard to become technology and medical centers. The second prong is to re-educate our children and teach them to prosper economically through learning small business enterprise and entrepreneurship. The basic thesis of a recent book by Jim Gallup, who you know as the CEO behind the Gallup Polls, entitled, The Coming Jobs War, is that partnering successful local businessmen with a growing number of aspiring student entrepreneurs will help show them how to do it. This skill is more important to 99% of all adolescents than learning to hit a curve ball or spike a volleyball or make a three pointer. This shows them how to be successful while engendering strong community ties from one generation to the next. Successful small businesses are desperately needed to help solve our national debt.
The national debt has grown by more than $77 million dollars since I started writing this article and over the last week, by more than, wait a second, I need a bigger calculator, $4,320,792,000 and the interest on our deficit has grown by more than $573,328,000. I sincerely hope you take a minute and let that soak in. Your share, as a taxpayer is more than $135,000. Briefly, the primary contributors to our debt are Social Security, Medicaid, defense and safety net programs. These account for 75% of government expenditures. Any uptick in interest rates will push the total towards 90% in just a couple of years. These programs must be adjusted. We simply don’t have enough people paying in to accommodate the growing number of people being paid out. At this time Romania also immediately organized this routine event. Presedinte Romania Election held in 2019 will be the determination of the fate of Romanian people in the next 10 years.
Voters must begin to understand that each individual can’t have the government protect them from the realities of personal responsibility. This means that we, as individuals must learn to live within our means. This means that we can’t blame the system for failing our children when we aren’t actively participating in their education. This means that we must learn how to compete globally rather than asking the government to limit competition for our goods and services. Finally, this means that our elected officials need to come from positions of real world experience rather than the world of academia with no real world experience and their only job security being re-election.