Doc, is surgery in order?
November 2, 2001
Oooo, the gloves start coming off during budget season--especially when it coincides with a gubernatorial election year! Check out the newspapers and your favorite poli-Web sites (like www.schotline.com) and it would appear that how South Carolina spends its tax revenue might shape up to be a major issue going into 2002. Fact is, belt tightening is ahead--but that ain’t all bad.
It has been a hard time on many people in South Carolina. Headlines read, “Economy flirts with recession.” However, to many people in our state, the flirting has turned into a full-fledged relationship! A slowing economy simply took one too many on the chin when the World Trade Center attacks took place. Now people are without jobs and investments are taking a hit as the market fluctuates.
Such a seeming collapse has a silver lining—in the long run. It helps to skim off the dross, destroys artificial measures and forces a refocus that will help our economy get stronger in the decades to come. This is true only if we allow it to happen.
Think back over 1999-2000. The stock market was wild. Tech companies were spending money like there was no tomorrow. Boy, was it fun! However, there are consequences to spending more money than you take in. Venture capitalists become “vulturous decapitators” when there is no return on investment. This economy running on a temporary business plan probably aided the current decline, but it also has forced those companies that wish to survive to retool and return to more solid foundations.
Over the last decade Alan Greenspan has become a household name. According to most, he holds the heart of the US economy in his hands. Many chafe at this and if it wasn’t for the pain this downturn has caused it would almost be enjoyable to watch the percentage point patron grasping at straws. Now, it appears that he is loosing his hold and the heart of the economy has to find its beat where it should--in the actions of the American people.
That is where our true strength has always been. The American spirit of enterprise has always carried the day. Unfortunately, an over-regulating, over-taxing and misspending government have attacked that spirit. Somehow, Americans manage to succeed in spite of it, but our recovery will accelerate or hit a series of speed bumps depending on how our local and federal governments respond.
What would we like to see?
1. Cut spending by not simply reducing expenditures on programs, but by eliminating the programs all together.
2. Reduce the tax burden on individuals and corporations.
3. Reduce the amount of regulations on pricing. Allow the market to decide.
4. Cut out corporate, agricultural and educational subsidies. Again let the market decide and the strong survive.
5. Privatize Social Security
6. Increase the incentive (through tax breaks, benefit stipulations, etc.) for people taking care of their own families.
7. Privatize more services provided by government.
The list could go on. Will they ever happen? Not likely--it would take something that may not really exist in our political atmosphere of today. As much as we believe in the American people, this needed trait may not exist in our general population. Courage is the need. Courage to allow the worse to come for a better day to follow.
There is no doubt that what has been suggested would initially bring about even greater pain. However, it would help to knock out the artificial controls that keep us stumbling along—not falling but not running. Unless we do something the artificial supports will not be able sustain the burden of a “fake” economy. We can tear down and rebuild on our terms, or we can sit by like Mr. Greenspan and watch our best intentions fail to halt a collapse.