Obama, Clinton and Federal Debt
People are rightfully worried about the federal debt. In recent speeches, President Barack Obama has promised to tackle the debt in his second term in office.
When he came into power, America was in the middle of an economic collapse. He stopped that collapse by bailing out the major companies and banks of America, and now most of these companies and banks have returned to profitability.
The expenditure made was a one-time deal to prevent a bad crisis from becoming a worse crisis. And now that the economy is beginning to stabilize, it becomes possible to deal with the debt.
Obama's prescription for dealing with the debt is the rightful one. It is restoring the policies that have worked before - the policies of the Clinton Administration. It is a combination of responsible spending cuts and a return of the higher-income-bracket tax to what it was during the Clinton era. The middle and lower incomes are not being touched by this. The only tax raise proposal is on those who can afford it: the highest income levels in America.
This is the meaning of rational policy. A rational taxation policy should be designed in such a way as to maximize revenue and minimize suffering. A higher-income-bracket person (which I have been) is not made to suffer by paying slightly more in taxes. Whereas revenue gained for the government through this mechanism is vast and enough to turn the deficit into a surplus.
More revenues still can be obtained by ending tax incentives to relocate jobs overseas and also ending offshore tax shelters and tax loopholes that allow the wealthiest Americans to not be taxed on their income.
Now that the economy is no longer in the free fall, we stand to see real improvement in the fiscal situation of America. We stand to see restoration of policies that have worked. The second term of Obama is likely to look a lot more like the Clinton years than like the FDR years. And this stands only to benefit the people of America.