CREATIVE FINANCING/SP VOICE/JULY 09

During the Bush years I regularly excoriated the President for his failure to raise the revenues required to fund entitlements and pay for the incursion into Iraq. Like many Presidents before him (particularly Ronald Reagan) Bush made up the difference between what the government collected and spent by selling bonds to the outside world (particularly the Chinese). By the end of his administration, the national debt had ballooned to a point where our nation’s financial future was in grave jeopardy.

I had hoped that the current administration would lead us in a new direction. Sadly, the Obama administration has made Bush look like an amateur in running up deficits. Even if everything goes according to plan, our current outlays will leave us trillions of dollars in debt. This is unacceptable. Don’t get me wrong, I am in support of the many initiatives employed over the past few months to bolster our nation’s economy and maintain our manufacturing base. The problem is that, like Bush, President Obama has demonstrated that he is very good at spending money we don’t have but reluctant to raise taxes to change the situation. Like most politicians, he is afraid to make our nation’s citizens pay the real price for the programs that most Americans desire.

So the question is how do we raise revenues to fund the government without killing the economy? First off, all of us, not just those who make over 200,000 dollars a year will have to pay more in taxes. The rich should pay their fair share, but so should everyone else. However, even a liberal like me understands that you can only get so much money from personal income levies; at some point people of all political stripes and income levels rebel and find ways to evade the taxman.So if income taxes are not enough to close the gap what else can we as a society do to obtain the additional revenues we need to keep the country going? I believe several initiatives would be a good start.

1) Legalize and tax marijuana sales: Some say marijuana is a gateway drug, but the reality is it is no more a gateway drug than scotch or beer. Some people who have two martinis to mellow out after a hellish day at the office recoil at the thought that someone would use a joint to achieve the same effect. I have not been around the stuff since college, but reliable sources inform me that it is easier to get a dime bag of marijuana in good old Severna Park than it is to get a six-pack. Countless dollars pass hands and Uncle Sam gets not a farthing of this burgeoning business. Don’t tell me that this will turn our nation into a bunch of dope fiends. Marijuana is not crack cocaine or heroin. Millions of our nation citizen’s use the drug every day without paying taxes. Taxing grass will reap millions, perhaps billions in revenue.

2) Legalize and tax gambling on professional sporting events: Since the early 1930s, betting on professional sports of all kinds has been legal in the United Kingdom. Since that time, our British cousins have collected massive revenues from the gambling enterprises that run that nation’s sports books. Again, the nervous Nellies of the world will cringe at the thought of a New York Giant fan placing a bet on his team to beat the Jets. This is ridiculous. Citizens of the UK routinely bet on the games of Barkley’s Premier League (Soccer’s version of the NFL) without the world crumbling to pieces. Why not allow our citizens to do the same and reap the financial benefits.

3) Create a single payer government run health care system in the United States: Canada as a nation spends less money than the US on health care yet its citizens live longer, healthier lives. Canada also has far lower infant mortality rates. The idea that socialized medicine is a failure is a myth. True health care reform would save billions of dollars and allow all of our nation’s citizens to have access to safe affordable care for themselves and their families.

However, you cannot balance a budget on sin taxes and health care reform alone. In the end, economic growth cures budget deficits. With this in mind, our nation needs to lead the way in getting the world off petroleum. We have the brains and talent to develop the new technologies of the future to solve this problem. What we do not have is the leadership. Think for a moment of how personal computers and recent innovations such as the Ipod have changed our world. No one uses IBM Selectrics or Sony Walkmans anymore. Innovation made them obsolete. We need to come up with new ways to power our cars and heat our homes that do not need or use petroleum. Furthermore, we need to build these new technologies IN AMERICA.

The potential for our nation to lead the world into this new era is immense but we will never get there if we give in to the antediluvian types whose only solution to the problem is to “drill, baby drill.” Most importantly, innovation and new technologies not only make life easier they also generate untold tax dollars, dollars that along with the aforementioned sin taxes have the potential to make our nation fiscally solvent. The dot.com revolution produced massive economic growth. A revolution in the way we use energy has the potential to do the same.

Finally, in a recent encyclical Pope Benedict made the important point that the world needs to ““rethink the economic and financial paradigms that have been dominant in the last years.” He is so right. It will not be easy, but if we are willing to sacrifice and work through this demanding time, we can begin to finally put our financial house in order and ensure a better future for ourselves and our children’s children.