Our economic problems

This article was sent to President Obama, our senators and our representative to no avail. It is my opinion on the current economic problems and should be shared with the public.

There is one thing I would like cleared up. We often hear that Social Security and Medicare are the largest federal spending items. That was true at one time, but those who made the statement did not take into consideration the millions of dollars of income from Social Security and Medicare that are deducted from our income.

If that income is taken into account, the cost to the national budget is insignificant. Everything will pale by comparison to the current and proposed bailouts and stimulus.

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The economy: No. 1 priority: As a longtime Democrat, I am disappointed so far in the activities of my leaders. After eight years of George W. Bush and the Republicans' deficit spending and all of President Obama's promises of change, we are going down the same road, apparently trying to outspend the previous administration.

Tax refunds (stimulus) do not work: A friend got a $550 Bush tax stimulus rebate. He bought a suit made in Indonesia, shoes made in China, a camera made in Japan and a short made in Taiwan. All of this was on sale, so the local merchants may have made 10 percent that stayed in the U.S. The rest went overseas. This did not help the economy. This is a good example of why bailouts or stimulus payments do not work.

Bailouts do not work: Bailouts are not the answer. The multibillion-dollar bailouts so far for Wall Street or Main Street and the automobile industry are a drop in the bucket and are a temporary solution at best.

Salary caps versus tax increases: Quit quibbling about salary caps. Instead raise the taxes of CEOs 5 percent for every $100,000 of income over $500,000. They are milking their corporations dry, resulting in little or no dividends and sometimes huge losses. The government needs to increase income, not spending. So away with the main loophole, the capital gains tax, or limit it to 5 percent a year.

$800 billion bailout: Everyone would like to help the unemployed and those who have lost their homes. Currently, there are 11.1 million persons unemployed and an estimated 448,000 foreclosures.

Unemployed bailout: The best solution for the unemployed will be to immediately revise the unemployment benefits program. This could be done by making the benefits available to all, not just those whose employers have unemployment insurance. And benefits should be extended beyond 26 weeks to at least one year.

Foreclosures: Helping the foreclosure victims is more difficult. I do not think we can help them financially, but we may need to pass laws to prevent further foreclosures and help the current victims back into less expensive houses.

Deficit spending, inflation, recession: Eight years of deficit spending and printing and circulating excess dollars resulted in inflation, easy money, a spending frenzy, law lending and the housing mortgage crisis. We should start trying to avoid deficit spending.

Domestic productivity versus government spending: The government cannot support the country. Globalization has ruined us. Seventy-five percent of manufacturing jobs and even service jobs have gone overseas. This should be our No. 1 priority, and we should be taking immediate steps to get jobs back in the U.S. A tax incentive to manufacturers might help, but we have to consider tariffs on items that can be produced in the U.S. Items essential to our own productivity should be excluded from the tariffs.

Globalization danger: The eventual result of globalization will be raising the standard of living in Second and Third World countries and lowering our standard of living to their level.

Instead of globalization, we need to lower the disparity between the rich and the poor or even the middle class. The Bible teaches us that the meek shall inherit the earth. At the rate we are going, the billionaires will own it.

In summary: If we continue to circulate and print dollars and 75 percent of them go overseas, eventually foreigners will own our country.

Soviet Premier Khrushchev once said he would take over our country and never fire a bullet. His plan did not work. But if our free-trade policy continues, it could happen.

Jack H. Knowlan Sr. is a Jackson resident.