I often hear people say, “I am socially a Democrat but I’m fiscally a Republican.” To me, however, this sounds highly contradictory.
To be a Democrat is to be socially liberal and fiscally conservative. After all, government’s job is not to control people’s lives, but help people control their own lives. In all my blog posts, I have tried give meaning to this concept. But now it is time to take a look at the six main pillars of the “fiscally conservative” handbook to reverse the notion that “government is not a solution to our problem, government is the problem”.
When companies like GM and Chrysler were on the verge of bankruptcy, there were no private companies or investors willing to assist these companies. It was only then that the need of government intervention arose. By saving the American auto-industry, the President saved millions of American jobs and created an environment where we can continue to compete globally.
2. FREE MARKET
Let us not forget that businesses -- not government agencies-- are the true engine of job creation. But when they stop hiring or are deregulated to a point that unfairness occurs, we need the government to enact policies that allow the free market to occur. This, in turn, actually strengthens capitalism by providing predictability, stability, and fair competition to the market (which is why we illegalize monopolies) and prevents fraud that hurts companies who play by the rules.
As the President mentioned in his State of the Union, “We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”
This is why the President passed Wall Street reform to end "too big to fail" bailouts and keep government out of the private-sector. This will also protect consumers, reward managers who play by the rules, and prevent another financial crisis.
3. SMALLER FEDERAL GOVERNMENT
The Emergency Jobs bill provided billions of dollars in needed assistance to help states avoid a budget crunch that would force them to lay off teachers, firefighters, police and other public workers. Thus, it helps strengthen states to make decisions on their own.
The Affordable Care Act also left power to the states by reforming the private health-insurance market to avoid a government-run program and helping these states pay Medicaid payments to doctors. Further, by adding 30million new patients for doctors and customers for insurance companies, costs for states are reduced.
4. INDIVUAL LIBERTY
Keeping the Federal government out of marriage and abortion protects an individual’s freedom to marry who they love and a woman’s right to choose what to do with her body.
5. TAX CUTS
President Obama has passed the largest tax cuts in history with his first stimulus package. The previous record was held by President Bush’s “Jobs and Growth Tax Relief Reconciliation Act of 2003” which amounted to about $230 billion in tax cuts. President Obama’s “American Recovery and Reinvestment Act of 2009”, on the other hand, amounted to about $280 billion in tax cuts. The difference was that the Bush tax cuts were targeted at the wealthiest Americans, whereas the Obama tax cuts were targeted at the middle-class and small businesses.
As President Obama explained in his State of the Union, “Democrats don't begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it's not because they envy the rich. It's because they understand that when I get tax breaks I don't need and the country can't afford, it either adds to the deficit, or somebody else has to make up the difference - like a senior on a fixed income; or a student trying to get through school; or a family trying to make ends meet.”
Given this choice, President Obama also helped lower taxes for millions of Americans by making healthcare cheaper and more affordable, helping students pay off their college loans, reforming the credit card industry, providing tax incentives to small businesses, extending the payroll tax cuts and unemployment benefits, raising the debt ceiling, and ending the Iraq War.
All these not only cut costs, but also help save billions of dollars while putting more money into people’s pockets. This, in turn, allows them the flexibility to divert their attention from finding access to basic necessities to finding a job.
According to the Bureau of Labor Statistics, only a small percentage of employers have reported regulation as a reason for laying off workers. Instead, the data shows that the main issues were tied to insufficient demand. Specifically, if no one can afford to buy what a business has to sell, the business will soon fail and jobs will be lost. In this sense, an ordinary middle-class consumer is more of a “job creator” than the average CEO.
This is where we need government. Not to “socialize” every aspect of our society, but simply to help increase consumer demand and provide added assistance to the private sector. The best way to create demand, therefore, is by providing tax breaks for the middle-class. It is by keeping benefits, like Social Security, Medicare, and unemployment benefits that millions of Americans are dependent on. It is by educating our citizens to ensure they are able to compete with the rest of the world.
But I still wonder how someone can be a Democrat without being fiscally conservative?