Get Serious on the Impending Bankruptcy
It’s not just about tax cuts.


Conrad Black

Lawyers are strangling this country, and most consultants just provide an insurance policy for managers who can’t manage. Most luxury goods are imported from countries whose economies the United States has self-sacrificingly carried on its back for decades: Germany, France, Italy, and Japan. They are all great and friendly countries, and protectionism must not be considered, but a supplementary sales tax is justified and useful in itself, and especially so given that the crumbling euro and the long-term decline in the yen (though not occurring now) have conferred an advantage on the exporters. A reasonable menu of such measures as these would cut a swingeing stroke through the federal budgetary and current-account deficits and send the message that the U.S. is serious about retention of its status as the world’s leading economy and issuer of the world’s reserve currency.

The steady rise in life expectancy for most categories of Americans, and in their physical and mental fitness in the upper decades of their lives, justifies the raising of the retirement age in Social Security and private plans. People should be encouraged to work longer, and those who do so should enjoy a reduced rate of income tax in the last two to five years of their working lives. The alternative is to slide steadily further into the Greek nightmare, where 30 percent of the people were working and 70 percent were drawing benefits of some kind, from public education to state pensions, when the entire system came down.

The income-disparity issue would be addressed by modest — I emphasize, not confiscatory — surcharges on extremely large incomes and small taxes on very large fortunes, the proceeds to be directed by the taxpayers themselves toward approved projects (as bona fide philanthropies are approved), for the reduction of poverty. This would take the sting out of a nasty political controversy that incites envy and extreme political antics, and would put the most agile financial minds in the country to work trying to eradicate poverty. The taxes would be self-reducing, as defined poverty declined, so there would be a built-in incentive for the wealthiest to seek the end of poverty. This would be a practical, as well as an acoustic, improvement on Warren Buffett’s plaintive request to be taxed more highly and the unenforceable pledge to give most assets away when he and other wealthy people die.

These ideas are not carved in stone, but at least they conform to the need to reduce reliance on the service economy and addiction to imported goods and commodities. And they are something of a departure from the fierce firefight over tediously familiar tax arguments that is all our political class has been capable of since the flat tax and the simplified tax made their appearances as political ideas almost 40 years ago. The political class has generally failed and misgoverned the country almost since the end of the Reagan era, which is why the first President Bush was defeated and his three successors all had, and then lost, control of the Congress. Instead of threatening not to lift the debt ceiling, the Republicans in Congress should lift it with notice that it will not be lifted again and attach suggestions for deficit reduction, which will take automatic effect if the ceiling is pressed again. 

In a democracy, the people get the government they deserve. The way to get better government is to require and reward original public-policy formation that addresses the country’s problems in the approximate order of their importance. There are a few high office-holders, visible already, who meet this criterion, such as Paul Ryan (mentioned above, chairman of the House Budget Committee), Mitch Daniels (governor of Indiana), and possibly Chris Christie (governor of New Jersey) and Marco Rubio (U.S. senator from Florida). There must be others, in both parties. They might raise their heads if the media made it clear that this would lead to appreciative attention and not instant decapitation, and if the public made it clear that business as usual is, for everyone, in Marlon Brando’s phrase from On the Waterfront, “a one-way ticket to Palookaville.”

— Conrad Black is the author of Franklin Delano Roosevelt: Champion of Freedom and Richard M. Nixon: A Life in Full. He can be reached at [email protected].


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