Excerpt

The following opinion piece by Bernard Weinstein, associate director of SMU's Maguire Energy Institute, first appeared in the November 12, 2010, edition of AOL News.

Opinion: 3 Painless Ways to Kill the Debt Dragon

 

November 22, 2010

Gen. George S. Patton once proclaimed that the duty of the American soldier wasn't to die for his country but to get some poor bastard from another country to die for his.

We would do well to pay heed to that advice as President Barack Obama's debt commission starts to lay out the pain and sacrifice it says will be needed to cut the nation's crushing debt load. The message of U.S. citizens to federal officials should be "You first."

To be sure, Obama's bipartisan deficit hawks, former Republican Sen. Alan Simpson and former Clinton White House chief of staff Erskine Bowles, are correct in asserting that the deficit can't be reduced without some painful cuts to entitlements and popular tax loopholes.

But for the public to swallow those bitter pills, government also needs to demonstrate it is doing all it can to minimize the pain on U.S. taxpayers by adopting policies that spur long-term economic growth. After all, faster growth can carry much of the burden of debt reduction, reducing the need for tax hikes and spending cuts.

On that score, though, the federal government has continued business as usual by stifling development of our greatest assets: our natural resources, our communications systems and our general innovativeness.

So here are just three simple ways to generate hundreds of billions of economic growth — each year.

Energy Resources:

In a 2009 study for the American Energy Alliance, economist Joseph Mason conservatively estimated that development of currently off-limits offshore oil and gas resources would boost the national economy an extra $273 billion a year.

Unfortunately, the recent gulf oil spill has provided the administration an excuse to keep that development bottled up -- cheating both federal and state coffers of an estimated $2.2 trillion in revenues over the next 30 years.

Federal officials need to promote safety, of course, but not by denying access to resources than can provide thousands of new jobs and help stimulate the nation's moribund economy.

As for renewable energy, rather than handing out subsidies to favored constituents, from farmers to wind power generators, the federal government could promote open access to foreign markets or ease construction of domestic electricity infrastructure, which would make wind farms truly viable.

Communications:

It's not just our energy resources that are being quarantined behind red tape. The Federal Communications Commission estimates that auctions of our nation's radio spectrum could raise as much as $120 billion for the federal purse.

But the commission is considering rules governing broadband development that would impose 1930s-style telecommunications regulation on the industry and almost surely reduce the value of the broadband auction.

Meaningful Tax Reform:

Even as the deficit commission talks about reducing tax write-offs for mortgages and the like, policymakers seem unwilling to reform a tax system that, according to the Tax Foundation, piled on more than $493 billion in compliance costs on top of the $2.2 trillion in revenues it's projected to collect this year. In other words, it costs taxpayers more than 22 cents in compliance costs for every dollar they pay in taxes. Cutting that cost in half would redirect over $200 billion a year to real economic growth rather than paper peddling.

There can be no gain in deficit reduction without some pain. But spurring long-term economic growth is a necessary prerequisite for slaying the deficit dragon. After all, if the deficit is the enemy, the aim should be to kill it and not have American taxpayers and businesses die trying.


Dr. Bernard L.Weinstein is associate director of the Maguire Energy Institute and an adjunct professor of business economics in the Cox School of Business at Southern Methodist University in Dallas.

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