Colman: A NEW IMAGE

This article is about America needing a “new image”.  Maybe what it really needs is a CONSISTENT image and set of policies.  Reagan cut taxes, Clinton cut taxes, then Obama raised taxes, Trump cut taxes and Biden raised taxes.  Obama and Biden flooded our nation with criminals and terrorist form foreign countries, Trump cut that out.  Obama and Biden tried to kill our national energy supplies, Trump expanded them.  Politics have become a ping pong game—in the long run, no one knows whether we want to be a prosperous nation or a Third World County.

Until our policies become consistent and predictable, we will continue on the road to be a DOOM LOOP nation.

The November 5 election is about returning freedom and prosperity to our future—or stay on the road to a failed totalitarian nation.

A NEW IMAGE

By Richard Colman, Exclusive to the California Political News and Views,  6/5/24   www.capoliticalnewsandviews.com 

American politics has become stale and boring.

Let’s ignore the temporary media frenzy over Donald Trump’s hush-money convictions.

The nation needs a new image –- and new policies –- to bring about prosperity, jobs, and additional investment.

Since the end of World War II, America had boom years during the administrations of Harry Truman, Dwight Eisenhower, Ronald Reagan, and Bill Clinton.  Much of the time, these administrations –- Reagan was an exception — produced balanced federal budgets.  In Clinton’s case, there were four consecutive balanced budgets (1997, 1998, 1999, and 2000).

Speaker of the House of Representative, Newt Gingrich (R-GA), should get some credit for Clinton’s balanced budgets.  Gingrich demanded balanced budgets.  Clinton agreed as long as Social Security and Medicare were not touched.

During the Clinton presidency (1993 to 2001), inflation and unemployment were low.  The stock market soared.  During Clinton’s reign, the Dow Jones Industrial Average went from 3,000 to almost 12,000.

The first thing that the federal government needs to do is to stop adding to the national debt.  In 1981, the national debt was $1 trillion.  Today, that debt is close to $35 trillion.

To finance the debt, the nation has to sell bonds –- often called U.S. Treasuries –- to buyers.  The buyers are American citizens, American corporations, and foreign entities (like Japan and China).  The bonds pay interest and are insured by the American government.

The American government — under such presidents as George W. Bush, Barack Obama, Donald Trump, and Joe Biden –- has spent money recklessly.  Congress must share the blame because Congress must approve the spending of money.

Tragically, the major 2024 presidential candidates, Donald Trump and Joe Biden, have not, in their respective campaigns, even mentioned the national debt.  These omissions can be called “political malpractice.”

In 2017, Trump sponsored a huge tax cut but did not curb spending.  The result was an even larger national debt after Trump’s four years in office.

The selling of U.S. Treasuries (bonds) to finance the debt can only continue as long as buyers of debt remain willing to lend money to the U.S.  If and when these buyers fail to purchase the bonds, America will have to cut spending, raise taxes, or do both.  The American standard of living will fall.  The stock market will drop or collapse.

By borrowing money, the U.S. is like a person with huge credit-card expenditures.  Eventually, the bill must be paid.  In the meantime, Americans, by borrowing money, enjoy a phony prosperity.

What can we say about the stock market?  No one knows where the stock market will be after the November 2024 election.

But there are troubling signs if either Trump or Biden wins.  Currently, stock market indices are at or close to all-time highs.

But investors should be prepared for a market correction after the election.  Both Trump and Biden are protectionists, meaning that they support tariffs -– another word for taxes -– on imports.  Specifically, Trump has called for a 10% tariff on all imports.

Trump and Biden should remember the destructive effects on world trade when, in 1930, President Herbert Hoover, a Republican, signed the Smoot-Hawley tariffs.  The Great Depression, which began in 1929, was aggravated.  When the U.S. imposed the Smoot-Hawley tariffs, other nations retaliated.  World trade shrank.  Jobs were lost.

In recent years, both Trump and Biden have supported tariffs on imported washing machines, steel, and other items.  The result has been higher prices for American consumers.

Whoever is elected in November could mean more deficit spending, more inflation, and higher unemployment.  Tariffs should only be imposed if trade with other nations jeopardizes American national security.

But putting tariffs on such items as Japanese, South Korean, and German cars, electronics, and other imported goods could trigger a stock-market correction or even a stock-market crash.

Americans would be better off if the nation followed the policies of presidents Ronald Reagan and Bill Clinton, both of whom advocated free trade.  Under both presidents, prices were stable, jobs were plentiful, and the stock market soared.