How to Get Back to Growth

Passing a pork-laden bill takes no time. Trimming subsidies or raising taxes is near impossible.

By Fareed Zakaria | NEWSWEEK

From the magazine issue dated Jun 16, 2008

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Posted By: TJClaude @ 06/14/2008 11:19:39 AM

Comment: Yes. Congress and lobbyists ARE the problem. Reason must prevail. They appear to have no Vision of what the Nation's future will look like if they continue on this path of irresponsbility and favoritism. Let's have some plans presented that gives us a balanced budget in six to eight years and then include, in each succeeding budget, a line item for debt reduction. Imagine the impact globally , as well as Nationally, if this were a part of the "plan." Thank you.
Posted By: emmarcee @ 06/13/2008 11:05:31 AM

Comment: Oil prices are high because of the following factors..with America's waning clout middle easterners don't want to sell so cheap anymore. Republicans want to give the big oil the green signal to look for resources locally and democrats want to screw Republicans. Republicans (and probabaly later Obama) will give a leeveway for American comapanies by giving big tax breaks for finding new oil and improving infrastructure. We are poor spectators. Nothing is going to change till the dust settle down.
Posted By: rene591 @ 06/11/2008 2:38:01 PM

Comment: drill,nucluer power,bio fuels,coal gasification and increase supply. lets have the other states that are addicts(california and florida) who do not contribute to energy supplies do something like drilling or even wind.
Posted By: rene591 @ 06/11/2008 2:35:58 PM

Comment: drill,nuclear power,coal gasification and more drilling. time for the rest of the states to pull there respective share of the power comsumption curve. you use it you produce it hear me Californians and Floirdians
Posted By: austin c @ 06/11/2008 9:05:51 AM

Comment: The author stated "Unless entitlements are trimmed substantially, America is headed for fiscal bankruptcy. Immigration policy needs reform, most urgently so that the United States can once again attract the world's most talented people". The first sentence sounds like some politicians who are in favor of privitize the social security and medical system, the second sentence sounds like Bill Gates who would like to increase the immigration quota of foreign scientist and engineer because they are less expansive than those trained in U.S. .
Posted By: tuner 73 @ 06/10/2008 10:24:42 PM

Comment: More prattle about government fixes. Government is an agency that has a specific delimited function and it does not include monkeying up the economy. Production is a function of the private sector as is trade. Keep trying to insert government methods into free markets and watch the free markets disappear. Watch demand outstrip supply and watch automobiles be available only to the politicos. Put your faith in the phony promisees of vote beggars and enjoy the pain of incompetence. This is the reward for looking to Washington for solutions.
Posted By: jgomez_miranda @ 06/10/2008 7:29:41 PM

Comment: I am really tired of the discussion of immigration in bulk. We have immigration advocates that want to admit everybody and immigration adversaries that want to keep everybody out. I am glad that the writer stated the obvious. and said that skilled immigrants are good for the economy although he forgot to say that the door should be shut close on unskilled immigrants (due to our broken educational system we have a lot of unskilled people here without having to import them). Saying clearly that we want skilled people and refuse to take unskilled ones would be politiically incorrect but most common sense reasoning is. not politically correct.
Posted By: morbie5 @ 06/10/2008 6:34:19 PM

Comment: I knew he would mention India somewhere. He always does.

Zakaria is one of those fools who thinks we can't have enough immigrants; never mind what they and their family's cost the taxpayer.
Posted By: d1newsweek @ 06/10/2008 3:59:18 PM

Comment: This article is totally worthless for serious economic policy debates. He made general statements rephrasing sentences from other newspaper articles. The author has no depth and training on writing on economic issues- He should read Paul Krugman's articles on economic issues.
Posted By: d1newsweek @ 06/10/2008 3:58:43 PM

Comment: This article is worthless from policy debate perspectives. The article--having no specificites and statistics-- is replete with general statements--mostly rephrased from available sources, should not have been published.
The author may benefit by reading Paul Krugman's articles on economic issues. He should concentrate on international isues.
Posted By: d1newsweek @ 06/10/2008 3:54:13 PM

Comment: This article is totally worthless for serious economic policy debates. He made general statements rephrasing sentences from other newspaper articles. The author has no depth and training on writing on economic issues- He should read Paul Krugman's articles on economic issues.
Posted By: jirvin6878 @ 06/10/2008 1:50:16 PM

Comment: There is a nearly universal belief among those who do not study history for a living that yesterday was better than today, that it was simpler, more just, or that people were more self-sacrificing. History teaches us the opposite, that things improve over long periods of time--even though human societies may regress for short periods. However, we must not allow the general "progress" of human history to foster an unrealistic optimism. Any economic problems we now face as a nation can be solved by a simple return to basics, fiscal responsibility, an equitable tax policy, and the curbing of excessive consumer appetites. Simply lowering taxes or threatening our enemies with annihilation will not solve our problems; but, an overly enthusiatic faith in federal programs may also be unwarranted. We are not doomed but we may be in for some pain.
Posted By: neoconx @ 06/10/2008 12:27:52 PM

Comment: barbara boxer told us the other day that raising our taxes gives us hope....the messiah, barack, says that raising taxes is the change we've been waiting for.....and idiots like the first commenter don't understand that the middle class OWN the big corporations, through their investment funds...we're doomed.
Posted By: stationakl @ 06/10/2008 11:58:48 AM

Comment: It is misleading to refer to 15 year trends in the economy. There are really 2 seperate periods, the '92 through '00 period and the last 7 years. In the first period, productivity, jobs, profits and personal income (somewhat) grew strongly. In the last 7 years, only corporate profits have grown. The claim above is that, on average, 157,000 jobs were created each month, but since Bush took office, not even 10,000 per month were created. It if shockingly clear that cutting taxes on the very wealthy does not create jobs, it does not drive enough economic growth to raise government revenue, and it causes consolidation of wealth in the hands of the very rich. The most presing reform needed is to move the tax burden from the middle class and their children to the wealthy and large corporations.
Posted By: wjohnsonw @ 06/10/2008 11:41:04 AM

Comment: "There are fnow ewer workers in the American economy". I find that hard to believe that we have fewer workers than 15 years ago (the time frame he is using. Couldn't he back that claim with some statistics?
Posted By: Ransompw @ 06/10/2008 11:24:04 AM

Comment: A point on Growth, America and Immigration(AKA response to the nonsense spewed by Lou Dobbs)

Simply put, America is not the nation it once was. The forces which shaped the conscious of this nation at its birth have slowly disappeared. Sometimes ???Great Qualities??? in a society are rent by the fabric of that society. I believe the notion that ???all men are created equal??? was inspired and confirmed as much by the experience of America as by inspired thought.

One need only look at the issue of immigration (legal or illegal) to appreciate the fundamental change in America. In a growing society with vast unsettled lands, open ranges and sparse population, immigrants were welcomes additions. Immigration in the 18th and 19th century was the backbone of this country???s growth and no one resented the extra help. Immigrants were welcome and become part of the great melting pot that was the United States. Unfortunately, in the current closed society, with much less room to grow, the perception (rightly or wrongly), is vastly different. Now immigrants are viewed as competitors that diminish what is left to be divided. This fundamental change cannot be waived away by rhetoric or good intentions. No matter what we say or do a crowding America will only worsen this sentiment.

This isn???t the only symptom of this fundamental change in America. You see, there is also a purpose in growth which touches us all and binds us together in ways which help overcome our differences. When growth stops and society closes, its individual members turn inward and concentrate more on their individual purpose. Special interests grow and common interests wane and we are left with a very divided society. A great leader can inspire us for a time, but rhetoric and good intentions can not overcome the lack of a common purpose. Today even so called common purpose issues deal principally with what government can do for individual citizens not what we as a country are going to do together to build a future.
Posted By: Miles W @ 06/10/2008 9:05:51 AM

Comment: It's time for a flat tax!! Many countries including Russia already have one and their economies are exploding. Instead, Obama's gonna drive businesses out of the country by raising taxes and cause another depression. He just doesn't get it.
Posted By: Miles W @ 06/10/2008 9:02:01 AM

Comment: It's time for a flat tax. So many countries including Russia already have one and their economies have been exploding. By increasing taxes, Obama's gonna drive more business out of the country and make things worse. Don't understand why Democrats just don't get it.
Posted By: ZachJonesIsHome @ 06/10/2008 8:42:41 AM

Comment: The Conflict of Mind, Heart, Politics and Obama

When looking at someone in need, many questions arise. ...Committed people are the key to this kind of change. So what happens when the government and politicians get involved? ...So why do we have so much effort and desire being put forth to get the federal government involved in areas that it is ill-suited? ...All decent politicians, of all parties, go through the same questions the individual asks when they see people in need; they have the same desire to help, and compassion. The conflict of mind and heart is fully present. But laid upon this conflict is a bigger conflict, the conflict that arises by courting voters....
Consider: http://zachjonesishome.wordpress.com/the-conflict-of-mind-heart-politics-and-obama/
Posted By: ZachJonesIsHome @ 06/10/2008 8:39:00 AM

Comment: The Conflict of Mind, Heart, Politics and Obama

When looking at someone in need, many questions arise.
Consider: http://zachjonesishome.wordpress.com/the-conflict-of-mind-heart-politics-and-obama/
Posted By: Ransompw @ 06/10/2008 8:23:00 AM

Comment: I have read the article and the comments and it is no wonder there is a bleak outlook. Immigrants stopping young people from studing the sciences? The measley entitlements left in the national Budget preventing growth? Closing the Borders? Wow, most of you haven't a clue. This article is about Growth. Tell me how do you expect to grow? Which country had a better chance to grow, this country 150 years ago or this country now? Well folks it is that simple. Change the fabric, of this society and you change everything. So keep looking at the trees, because you have no idea what the forest is all about.
- Posted By: perfectforce @ 06/10/2008 9:00:15 AM
  
  Comment: Government policy is a very powerful and sometimes cohesive influence. Spewing slogans like "Change the fabric, of this society and you change everything " is vacuous and hence worthless. Your insults are truly most appropriate applied to yourself.
  - Posted By: Ransompw @ 06/10/2008 10:57:38 AM
    
    Comment: I agree Government policy can be a strong tool. But Government policy focused on symptoms and not problems is ineffective. This article was about Growth. A growing society is a powerful influence on its citizens and how they feel about their Government and each other. The society today is severly limited in its ability to grow. If you really want to see growth this Government needs to stimulate a variety of frontiers, both physical and technical, the rest will take care of itself.
Posted By: ploughman @ 06/09/2008 6:29:34 PM

Comment: Interesting Fareed mentions the growth run of the past 15 YEARS. Talk about selective statistics. For the average worker the ones that mattered were Clinton's, because under Bush the median income actually DROPPED over the course of a supposed expansion. Some three-fourths of the added benefit went to the top 1% on income and, despite working record hours and keeping their end of the bargain on productivity, most people actually LOST GROUND during an expansion. Oh, and we added $4 trillion to the debt. Those were the "good" times with Bush and now we're in the bad times.

Someone trying to look objectively at all those stats might just conclude the system is broken and has gotten badly off track. Does Fareed expect more than 90% of Americans to go along with another deficit-financed boom that doesn't benefit them? I think it's quite logical to use your vote for change under circumstances like that.

As for entitlements, it's ridiculous to suggest they have to be cut when Europe and Canada have much more generous benefits and are weathering this storm better than the U.S. Their currencies are stronger and, of late, their economies are doing better WITHOUT compromising the safety nets. They stand as always as a strong rebuke to the conservative think-tanks, and countries like Norway routinely beat the U.S. on U.N. quality of life indices. Yet Fareed won't learn from them and mentions only negatives.

Social Security and even Medicare are still salvageable. Social Security needs another deal like the Reagan-O'Neill one that'd probably have a raise in the income cap, some limited means testing (though no one cut off totally) and, as a last resort, a raise in the retirement age or a higher tax rate (the two least-popular things).

Medicare depends on forcing health-care costs down. Private insurance is simply NOT going to give people over 65 a decent deal, and often gouges and rips off those under 65.

Given the increases in numbers of senior citizens and their voting participation, it's unlikely that these programs are going to either go away or take significant cuts. McSame wants to extend the Bush tax cuts but, like Bush, won't say how he'd pay for them, which means more deficits.
Posted By: jonstorm @ 06/09/2008 3:58:43 PM

Comment: The Problem is the Federal Reserve is lending money to banks at 2% who are not lending money to consumers or businesses but to speculators who have been trading gold, oil and other comodities. This is driving the US dollar further down and strangling the US economy while not solving the "liquidity crisis" in the housing market. Banks will take record writedowns at the expense of the taxpayers and foreclose on many properties before driving prices up high and making record profits again.

These people should be taken out to the center of town and executed for treason.
Posted By: ThePrairiePrankster @ 06/09/2008 2:26:56 PM

Comment: Tax all income the same.

Defend our borders and develop a controlled immigration policy. We do need some immigration for farming and seasonal work. Plus our declining national birth rate will make Social Security, Medicare and goverment more costly, not less, the only way to mitigate is to have more legal workers paying taxes for their legally earned income regardless of their status. Penalize all who hire workers who are not here legally.

Cut back foreign aid until we no longer have a deficit. Do we really need thousands of troops in Germany and Japan 60+ years after WW2 is over? There are many threats in the world, why can't these prosperous economies pay for their own defense? If the Saudis can't help us out for defending them with lower prices then let's pull our troops out and stop paying to defend people who can afford their own army.

Let's not borrow money from China, India, Europe etc to pay for tax rebates that the taxpayer will repay with interest down the road.

Whatever happened to sacrifice?

Presidents used to ask Americans to sacrifice for the greater good. In past generations we gladly sacrificed to defeat our enemies. Now we are exhorted to shop and use oil from those who teach their children that the USA is their enemy..
Posted By: emmarcee @ 06/09/2008 10:41:36 AM

Comment: Contrary to what Fareed says, it is not entitlement issue with taking care of seniors.. it is taking care of your old and poor...I don't need Ivy league education to say these simple things. USA still needs immigrants - both skilled and non skilled. What we need is a real policy and system; not open doors at Mexican border. Though most of the H1Bs are mediocre, USA still manages to get a lot of bright people - top crop of the countries of origin. Whoever says otherwise talk from spite and withhout checking for reality. (including denmill a probable medical person).
What we need to do is scrap and trash our credit cards, stop the building frenzy, encourage neighbour hood stores, stop the mall culture, move closer to our jobs, live more healthy life style -- may be walk to work? stop buying cheap Chinese products, stop paying 5 dollars for Starbucks and $ 400 I-phones, stop making the entertainment industry dirty rich with your money, (one rap CD and you have a mansion.. gives wrong signals to the youth), build up familes.... we will be Okay. The way it looks, we will get to that point. This is one good thing the high oil prices do for us.
- Posted By: denmill @ 06/09/2008 11:22:10 AM
  
  Comment: Actually, I do agree with most of your suggestions. However, you did leave some critical points. 1) stop giving welfare to illegal immigrants 2) make english the offical language of the US, 3) close our borders, 3) reinvest in the traditional American values not in pop culture, 4) become more energy independent by not only inventing green products (it will take at least 30 years), but also increase drilling and developing nuclear power plan for oue energy, 5) stop the feeling of "ENTITLEMENT" (all able human beings should and must work (No job is lesser or too degrading (we need the garbage man as much as we need the brain surgeon), there are only stupid and lazy people that do not want to do any kind of jobs and rather rely on public assistance).
- Posted By: denmill @ 06/09/2008 11:18:44 AM
  
  Comment: Actually, I do agree with most of your suggestions. However, you did leave two critical points. 1) stop giving welfare to illegal immigrants 2) make english the offical language of the US, 3) close our borders, 3) reinvest in the traditional American values not in pop culture, 4) become more energy independent by not only inventing green products (it will take at least 30 years), but also increase drilling and developing nuclear power plan for oue energy, 5) stop the feeling of "ENTITLEMENT" (all able human beings should and must work (No job is lesser or too degrading (we need the garbage man as much as we need the brain surgeon), there are only stupid and lazy people that do not want to do any kind of jobs and rather rely on public assistance).
Posted By: denmill @ 06/09/2008 1:33:39 AM

Comment: Here again another liberal leftist of the media "Fareed Zakaria" trying foul us wilt words. Mr. Zakaria, I am going to respond to your comments. According to your own word Mr. Zakaria, "the problems are obvious. The retirement of the baby boomers is going to have a crippling effect on all government budgets???federal, state and local. Unless entitlements are trimmed substantially, America is headed for fiscal bankruptcy". The entitlements that you are talking about is the same thing that Barack hussein Obama wants to do ( Big Government and promise of given more and more to the people without any accountability) . In addition, you wrote: "Immigration policy needs reform, most urgently so that the United States can once again attract the world's most talented people". We have too many talented immigrant. Nowdays, American students cannot find engineering jobs in the US because the greedy CEO rather hired engineers from places like India, and abusing them financially by paying them pennies on the dollar. Moreover, illegal immigrants are destroying the country not only financially ( welfare, medicaid/medical), they are destroying our emergency rooms (numerous visits to ERs around the US for benign free cares) and are treathening the US Public Health. Have you realized that when immigrants come to the US legally, they have to undergo extensive physical exams and laboratory tests. The illegals that cross the Mexican border, are not tested. Every days, they are bringing severe strains of TB and Staph infections in the US. Diseases that have been erradicated in the past are now on the rise. You went on to say that :"Spending on research, technology and infrastructure needs a big boost. (U.S. spending on infrastructure as a percentage of GDP is the lowest in the industrialized world today.) Energy policy needs to be overhauled". The leftist tree huggers like Gore and Obama are against the independency of the US on foreing oil ( they block drilling for oil in the US and block construction of nuclear power plants, they want to crack the US economy because they are globalists rather than American (more loyalty to the world, than honor to the US). Furthermore, you mentoned:" Trade policy needs to be revitalized. Tax and regulatory codes need to be simplified in order to keep America a competitive place to do business". I hope that you meant to keep the Bush tax cut permanent. In a shaky economy, the worst think to do is to increase taxes. However, your idol "Barack Hussein Obama" wants to do just that. Why would companies invest in the US when they are being unfairly taxed by sick liberal who want to give more for welfare, illegal aliens, druggies to say the least?
- Posted By: lorenz @ 06/10/2008 4:18:53 PM
  
  Comment: Dude, you say "liberal leftist" but you quote that Zakaria suggests trimming entitlements, that would mean reducing government pay, nott ''given more and more". Quit your polarizing talk and understand the position of the article you are reading.
Posted By: perfectforce @ 06/08/2008 11:16:00 PM

Comment: The "skilled" immigrants that are coming to the U.S. are not the best and brightest, but instead are just average. The flooding of the tech job market by immigrants is discouraging our best and brightest from majoring in the sciences. New college students can see how the tech infrastructure is being run into the ground as a result of H-1Bs and outsourcing. We will see the U.S. lose its high tech lead to other countries. Ironically, it is the ever increasing number of H-1Bs that will finish us as a technological leader.
- Posted By: EKS25 @ 06/10/2008 3:40:50 AM
  
  Comment: I don't think it is the immigrants that discourage people to major in sciences, . It is the school system. The US is the only country where you actually need courage in high school to resist the peer pressure and be excellent. For some reason being a "nerd" is very uncool. If you are good in sports you are popular, if you are an A student or join the the chess club or anyplace else where you are supposed to think you are not.
  - Posted By: perfectforce @ 06/10/2008 8:10:00 AM
    
    Comment: The school systems that my children have and are attending do not possess the peer pressure effect to dummy down. In fact, competition to be in the top ten or twenty-five percent of the class is fierce. And, the schools I am referring to are your average every day suburban school.
    
    Being labeled a ???nerd??? these days is more a factor of your physical appearance and the degree to which you are introverted. You can excel academically all you want...just make sure to balance your life with some exercise and friends and you will be ???nerd??? label free.
    
    What is happening now is parents are discouraging their children from going into a engineering career or the sciences because they see the deleterious results of outsourcing and H-1Bs.
- Posted By: emmarcee @ 06/09/2008 10:24:48 AM
  
  Comment: Now I see Barack's message. Hope.. so vague anybody can take it and make his own dream. An american blue collar guy can dream about doing away with migration. A Ceo can dream about getting cheap labour. But... i did not get how migration discourages people from majoring... beats me. I think it is just in your head.
  - Posted By: perfectforce @ 06/09/2008 6:33:12 PM
    
    Comment: Google "supply and demand" and contemplate for a bit. Then think about too many people competing for too few jobs. Now take into account that college students are aware of this labor arbitrage and are choosing not to expose themselves to this exploitation. And there you have it.
Posted By: perfectforce @ 06/08/2008 11:15:15 PM

Comment: The "skilled" immigrants that are coming to the U.S. are not the best and brightest, but instead are just average. The flooding of the tech job market by immigrants is discouraging our best and brightest from majoring in the sciences. New college students can see how the tech infrastructure is being run into the ground as a result of H-1Bs and outsourcing. We will see the U.S. lose its high tech lead to other countries. Ironically, it is the ever increasing number of H-1Bs that will finish us as a technological leader.
Posted By: Ruthra @ 06/08/2008 9:18:49 PM

Comment: Good piece Fareed. Keep it coming...
Posted By: Ruthra @ 06/08/2008 9:18:14 PM

Comment: Fareed, keep it coming. A very good piece indeed.
Posted By: payette @ 06/08/2008 6:26:54 PM

Comment: More immigrants, Fareed? We are already at record levels of immigration. High tech workers like me can't find a job..so open the floodgates for more? Yes, that's exactly what we need. Push down wages further. The author is an elitist think-tanker and perennial apologist for cheap labor disguised as a semi-compassionate academic. I want his job.

How 'bout we rescue our currency by stopping the printing money to feed an endless war and tax cuts for the rich? How about an aggressive program of renewable energy? How about reinvesting in eduation to improve the lives an abilities of the masses of unskilled immigrants we have already taken in to feed the Bush cheap labor agenda?
Posted By: summer1216 @ 06/08/2008 11:18:37 AM

Comment: To Ron Paul for Pope: Social Security and Medicare are being used mainly by retirees. Are you calling retirees, who have worked their entire lives to support their families, lazy good for nothing parasites??? You hope the "drop dead"??? What kind of person are you?
- Posted By: emmarcee @ 06/09/2008 10:25:53 AM
  
  Comment: summer I agree with you. Fareed is bringing his own agenda.. well that is what these media peope do all the time, right? Just don't pay for them..
Posted By: notroubleatall1963 @ 06/07/2008 8:22:43 PM

Comment: Only Obama seems capable intellectually of thinking of the big picture and etching out the details with a brilliant cadre of economic advisors. I don't see McCain "getting it" - thanks for an excellent article, you're one of my very favorite writers for Newsweek!
Posted By: Ron Paul For Pope @ 06/07/2008 8:22:35 PM

Comment: Baby boomers are the biggest drain on this country. Gergen is right that the generation that followed the Greatest one puts shortsighted, narrow gain ahead of service to their country.

Zakaria's warning about entitlement programs is another indictment of this generation. Social security and medicare are already a huge fraction of federal outlays, and they will only get worse as more boomers retire.

I will vote for anyone who will eviscerate Social Security and Medicare, and force these lazy, good for nothing parasites to get another job or drop dead. I could use the savings in my taxes toward my son's education.
- Posted By: EKS25 @ 06/10/2008 3:47:42 AM
  
  Comment: The baby boomers paid into social security system and they are getting back part of the money they paid in. They would get a lot more if the government actually kept it separately with minimal return.
  Maybe you should look up the definition of parasite.
  
  According to your plan after your son education is done you should drop dead too?
- Posted By: ltcarpio @ 06/09/2008 12:39:00 PM
  
  Comment: Baby boomers have been a major contributor to the SUCCESS of this country - as well as to it's current problems. So, you want to return to the days of poverty stricken seniors eating dog food, or at best, electing to eat one meal a day so they can pay the electric bill??? Social Security is NOT just for seniors - a large percentage is in the form of disability payments to those under the age of 65, and many of those are under the age of 50. Medicare is the only avenue to adequate healthcare for millions of seniors - you want to see them dying in droves, too, because they can't afford even the most minimal healthcare? Go live in some other country, you unfeeling irresponsible IDIOT! Go tell your parents and grandparents to live on skidrow and beg for aspirin - because you don't give a damn for their wellfare.

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Posted By: austin c @ 06/11/2008 9:05:51 AM

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Posted By: jgomez_miranda @ 06/10/2008 7:29:41 PM

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Posted By: d1newsweek @ 06/10/2008 3:59:18 PM

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