Don't Panic, Here Comes Senator Mike Lee, Ghostbuster

Sen. Mike Lee (R-Utah)

by Ralph Benko, Contributing Author:  This week, once again, as Congress returns, we will be treated to more of the sound and fury signifying nothing that preoccupies both Washington and the media. Meanwhile, a series of sinister insolvencies across America portend ill.  Following on Puerto Rico’s headlining insolvency comes rumors about other American territories. Worrisome: The US Virgin Islands, American Samoa, the Northern Marianas, maybe even Guam.

It’s not just at our periphery. Illinois is in deep trouble, having recently raised taxes by billions, compounding its long term problems as it drives people and business out of state and out of its tax base while not raising nearly enough money to keep it afloat. A lot of its problem has to do with unfunded pension liabilities.

. . .  As Reason.com helpfully points out:
With states from coast-to-coast, both red and blue, marching towards fiscal insolvency, it seems rather pointless to observe Kansas' failures and proclaim "Look! Republicans can be fiscally irresponsible too!" Indeed they can.Meanwhile, Hartford, the capital of Connecticut, has bankruptcy-lawyered up.
All this is bad for the debtors and taxpayers and citizens. And bad for creditors.
If you are in the municipal bond market... could mean you.

Yes, Reason isn't wrong about cutting spending being harder than cutting taxes. But that's a constant.

What’s really going on?

Stagnation, that’s what. America’s economic growth rate is struggling along -- even in the first quarter of President Trump’s administration (something for which he is not, of course, responsible, there being lags) -- at less than half its historic norm.  Compounding a lousy growth rate over 17 years means the US economy is much smaller than it otherwise would have been.

Your income is lower. The tax base is smaller.

Trouble in River City.

If the economy had been consistently growing, since 2000, at close to 4%, as it did under Reagan after wringing inflation from the system and under Clinton, our personal and collective income would be dramatically higher. So would state and city tax revenue, without raising tax rates. So would return on pension plans, including public employee pension plans.

Higher too would federal revenue, shifting us from deficit to surplus (as it did under Clinton) ... potentially with plenty out there both for guns and butter. (I myself prefer butter.)

Win-win-win. Curiously, chronic punk growth is not a hot topic in the capital. The capital tends to mostly just cope with the status quo. It muddles along.

The biggest obstacle that Washington offers to America’s thriving is inertia. >snip<
Practical men, slaves of some defunct economist?  Exactly. . . .

Don't be naive! There is no Washington.

But its ghost lingers. A specter is haunting America.

Enter Sen. Mike Lee: Ghost Buster.

The artifacts of previous economic policy govern. Republicans now fixate on economic policies that disproportionately (unlike Reagan’s supply-side economics) directly benefit the wealthy. Democrats propound “fairness” that has a track record of perpetuating stagnation.

Well. As Churchill said in the House of Commons on October 22, 1945: “The inherent vice of capitalism is the unequal sharing of blessings. The inherent virtue of Socialism is the equal sharing of miseries.” We certainly can do better than making a Hobson's choice between unequal (or, more precisely, inequitable) sharing of blessings and the equal sharing of miseries.

Fresh thinking is needed to restore the healthy, widely distributed, economic growth rate that would allow workers, businesses, territories, cities and states to routinely flourish. Hence, how refreshing to see emerging from Senator Lee, vice chairman of the Congressional Joint Economic Committee, the Congress's in-house Think Tank, fresh thinking.

I praised Senator Lee two years ago, for the tax plan he co-authored with Sen. Rubio as an important starting point in changing our thinking . . .   It was therefore a great delight to discover that Sen. Lee is moving the discourse forward under the rubric of the “Social Capital Project." On May 25^th, to praise at Bloomberg from the center right to The Atlantic on the center left, Lee released one of the most interesting, and potentially important, works originating from the Senate to have crossed my desk in many years, perhaps since the passing of the great Senator Daniel Patrick Moynihan.  . . .

Lee hereby undertakes to shift the paradigm, to look at our predicament in a different way, and thus create a new path forward. This demands a project rather than facile solutions. His undertaking shows moral seriousness, all too rare in both parties, on Capitol Hill.

Lee is raising, not settling, questions. That’s exactly what is needed now.

This long-term initiative does not obviate the need for smart regulatory policy -- which President Trump has gotten under way -- or smart health care, tax, or, especially, monetary policy (preferably restoring the classical gold standard).

That said, getting America back on track is the most crucial thing. The most recent RealClear Politics polling average shows that 59% of voters consider America on the wrong track, only 33% think otherwise. (We haven’t been even tied for right track/wrong track since June 13, 2009, and then only for a day.)

Getting back on track assures success. As some smart Frenchman noted over 800 years ago, Rome wasn't built in a day. America will not be made great again impetuously, or in hyper-partisan fashion.

We do have within us the power to become great again. But how?

First step? Don't panic!

Whatever comes out of the daily fray in the Capitol, resuming this week, it’s valuable to keep to the fore of our minds President Eisenhower’s observation from a 1954 speech before the Second Assembly of the World Council of Churches quoting a former college president: “I have two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent.”

Senator Lee has seized upon the important thing. It’s important for all Americans, from our Pacific to our Caribbean territories, literally from sea to shining sea.  Across our purple mountains' majesty and fruited plains: through Illinois, Hartford, and everywhere in between. Important for all of us.

Don't panic and don't take your eyes of the important in preference to the urgent.

Eyes on Senator Mike Lee's Social Capital Project.
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Ralph Benko is an advisor to nonprofit and advocacy organizations, is a member of the Conservative Action Project, a contributor to the contributor to the ARRA News Service. Founder of The Prosperity Caucus, he was a member of the Jack Kemp supply-side team, served in an unrelated area as a deputy general counsel in the Reagan White House. Read his full column in Forbes.

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