The thing people who claim about the effectiveness of the New Deal miss is that it was a political solution ot a political problem. 7% unemployment is an economic problem. 25% is a political one. It may be that austerity and free market economics will get you better growth 7 or 8 years down the line, but the unemployed won't wait that long. The Bruning government in Germany in 1930-32 followed Paulite economics to the hilt, doing a unilateral 33% salary cut for state employees and attempting to aggressively cut spending. The result was they all voted for Hitler who promised public works, and they loved him for it.
In 1931, Americans were being cut down in the streets of Washington by the US Army. five years later the President won reelection with 61% of the vote. The New Deal was an unprecedented success on its own terms. People just have no sense of proportion as to what those terms were.
We need to cut government salaries by 25% and use the rest to pay off the deficit. Cut the president's pay to $250,000. Congressmens' salaries down to $100,000. Implement a 20% cut in all programs other than defense and security. Cutting taxes will allow money to be used in the private sector to hire workers and spend rather than going towards taxes which results in even more people working and reduces unemployment.
So you want a 20% cut in Social Security, Medicare, Medicaid, Veteran's Benefits, etc. while not touching Military Spending, which eats $800 billion or about 1/3 of the US Federal budget? I don't understand your logic.
Could you clarify your last sentence? It seems like you said cutting taxes will give employers extra money to higher workers rather than spending it on taxes that reduce unemployment. That makes no sense.
Yes I never said it would happen over night or that my solution had all the answers but it's better than Obama spending millions on honey bee insurance, eating patterns of a snail, and wool studies. I got my own wool study. I wear it and it keeps me warm.
The largest component of the Federal budget is Defense, after that it is Social Security, Medicare/Medicaid and Debt Service Payments. Those combined are over 70% of the Federal Budget. There is quite simply no way to balance the federal budget without substantial defense cuts or revenue increases. This is the same situation as existed under Bush II, and its why I give zero credibility to Conservatives claims to be deficit hawks. You can not be both a superpower and have low taxes. You actually have to pay for stuff and be stingy. The debt does not exist because of entitlements, but because people refused to pay for them, and it was not liberal who made having the cake and eating it too popular - it was supply-side conservatives. I agree that there comes a time when debt is more dangerous than other marginal aspects of the business climate, but in such a situation, the important factor is the expectation you will pay the debt back, not its size. The reason why the dollar has been suffering is because foreigners don't think the political balance in the US will allow taxes to be raised in order pay down the debt, and will instead opt to print money post-2012.
And government salaries, while a lot larger portion of expenses in Germany in the 1930s(all local school teachers and police were state employees, not people you want to piss off when facing a fascist challenge), salary cutting is never about saving money. Its about making a statement of moral sacrifice that everyone is sharing the pain. And it has been a disaster whenever it has been tried throughout world history, because the types of things unemployed cops tend to get involved with during depressions are not the sorts of things you want them doing.
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