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Sen. Fritz Hollings Headshot

Making Romney Electable

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It's off to the race for President Obama and Governor Romney. Immediately, they bog down in pollster politics -- size of government, values, vision, etc. Neither candidate campaigns on the needs of the country. Ten year plans to eliminate $4 trillion in spending don't cut it. The Ryan Plan doesn't balance the budget until 2040 and the Democratic Senate has refused to consider Obama's budget for three years.

The media is not much help. President Obama continued Gates as Secretary of Defense to defend himself from being "weak on defense." He continued the Defense Department policy of changing Afghanistan's culture. After ten years in Vietnam we learned that the military can't change the culture of a country. In 2014, Afghanistan's drug culture will persist with the warlords in charge.

Come June, the recession will have been over three years but the media keeps reporting that we suffer "the worst recession in history." It's the worst recovery in history. In 2006, the Princeton economist Alan Blinder estimated that in the next decade the U.S. would off-shore an average of 3 to 4 million jobs a year. We are losing jobs faster than we can create them. We are bailing the recovery boat as fast as we can, but don't mention the off-shoring hole in the bottom.

On Morning Joe the political pundits constantly crow "the people don't trust big government." What's the right size of government? The right size is a government without a deficit; a government with a balanced budget. We gave President George W. Bush a balanced budget in 2001 but he and President Obama have been borrowing and deficit financing for 12 years. The Congressional Budget Office estimates that the interest costs on the debt this year will be $445 billion. So we are forced to spend $445 billion for nothing.

The voters are frustrated. The country is fighting in all the wars but globalization. Globalization is nothing more than a trade war with production looking for a cheaper country to produce. Every country develops an industrial policy to protect its economy. Our industrial policy is to call for "free trade" and have Corporate America develop China's closed market. The United States needs to develop an industrial policy to make Corporate America want to invest and create jobs in our country.

Fundamental to an industrial policy is a Value Added Tax which is rebatable on export. The corporate tax is not. A U.S. manufacturer exporting to China is taxed twice: the 35 percent corporate tax and a 17 percent VAT when the product reaches China. But U.S. manufacturers in China import their product into the U.S. tax-free. We are not only building China's economy, but Germany's. The BMW plant in South Carolina doesn't make the engine or technological parts in South Carolina. They are produced in Germany, shipped at 3 percent cost; assembled at 3 percent cost and BMW produces a motor vehicle in South Carolina 13 percent cheaper than Detroit. Using its 19 percent VAT, Germany probably has as many manufacturing jobs in the U.S. as it does in Germany -- which we welcome.

The people are tired of the campaign. All they have heard for a year is that both candidates are for jobs, but the plants keep closing in their states. They have caught on to ten year plans to balance the budget; to do filibusters to fundraise; taxing the rich to balance the budget; appeals to their pride and charades to create jobs. Candidates and media worry about Medicare that goes broke in 2024 and Social Security that goes broke in 2033 but not the country that's already broke. The people are frustrated because the country is fighting all the wars but globalization. They are looking for the candidate to do something real to create jobs and pay for government. Replacing the 35 percent Corporate Tax with a 6 percent VAT does something real. The VAT has no loopholes; gives instant tax reform; produces billions to eliminate deficits and creates millions of jobs. Adopted or filibustered, doing something real is a win for Congress.

In 2008 the people were ready for change. Now they are uptight more than ever for change. The people don't have a clear choice for President. Romney is inept and Obama's real accomplishment is health care -- which he doesn't mention. President Obama adopted wars, tax cuts, prescription drugs, stimulation and bailouts without paying for them. Just before the vote in November the Congressional Budget Office will announce that President Obama has increased the national debt over $5 trillion in four years. Voters will be going to the polls thinking: "we can't afford four more years of running trillion dollar deficits." Looking for change could make Romney electable.