Personally, I don’t care who created this mess; I blame the American Public because we voted them into office. What I care about is that a strong fiscal policy is created to restore confidence and encourage economic growth. This requires a two-pronged approach involving spending cuts and increased revenue generation; timely implementation is also very important, especially in regards to confidence.
One doesn’t need to return to the tax rates of the 1950′s in order to restore confidence and a similarly strong economy. During the 1950’s the tax rate for the wealthiest was around 90%. In the booming 90’s the tax rate was below 40%, and it worked beautifully.
Without a strong fiscal policy there can be no confidence, and we will not get out of our economic quagmire. With confidence recovery is still going to take around a decade. There is no quick fix. It took decades to get us here, and it’s going to take time to get out of. The sooner we acknowledge what we need to do, the sooner we can take the required steps to get there.
The first and foremost is to let the Bush Tax Cuts expire. They were implemented after 9/11 in an effort to encourage economic growth. Letting them expire will increase revenue while bringing the tax rates for the wealthiest close to where it was during the booming ‘90s, which is still below 40%. On the other side, the spending reduction side, getting rid of Homeland Security, the TSA, and bringing our troops home would be responsible first steps.