A Message to Arianna And President Obama: You're Missing The Best Way To Make The Middle Class A Top Priority (PS: It's very affordable -- no deficit spending)
Dear Arianna: You've been rightly urging President Obama to "make the middle class a top priority", but you've missed supporting a major answer that's been laid out clearly in Huffington Post blogs by several HuffPost bloggers in recent months.
The bold solution is the so-called Buffett Plan! It was originally proposed by Warren Buffett in Fortune Magazine in November, 2003. He said "Our trade deficits are selling America out from under us. We've got to fix it now, and here's how to do it." At that time the U.S trade deficit was $400 billion and 4% of GDP. By 2008, the trade deficit was $700 billion and 6% of GDP, with thousands of companies out of business and millions of jobs lost. For the 5 year period 2004-2008, trade deficits added $3.5 trillion to the national debt! That meant many billions of dollars of lost income and jobs!
An attempt was made in 2006 to implement the Buffett Plan by developing needed enabling U.S. Senate legislation -- "The Balanced Trade Restoration Act of 2006" -- to require that annual value of U.S. imports not exceed our exports. But it didn't go forward then when the economy seemed O.K. The draft bill could be quickly updated and enacted now to make a profound difference to our economy and the creation of good middle class jobs. Sadly, it isn't even being discussed in the Obama administration. Arianna, your personal support might well get the attention that's needed!
The effect of the Buffett Plan would be far greater and longer lasting than the short term fixes that are being debated, like infrastructure repair or one-time hiring tax credits. And the Plan is self-financing from fees for import certificates. There'd be no need for more government deficit spending. Business will expand, jobs grow and our trade deficits and national debt will be gradually eliminated -- all good news for the middle class.
Perhaps best of all, we'd maintain a vibrant, job-producing U.S. market to be shared with all trading nations. Some might see it as a "protectionist" move. But they should recognize it as both prudent for the U.S. and good for the global economy. We would be sharing the U.S. market equally with foreign goods and would be abiding fully with all WTO regulations.
Talk about wake-up calls, this one is long overdue.