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Let's Fix Our Economic Mess

The hour is late and the clock is ticking. We need bold action

I'm a 70-year-old not-really-retired person, and I want to talk with you about the grave economic danger we face. If we were sitting down face-to-face, I would lean forward and say: Our country is in danger of going off the rails economically.

See also: Older Americans need health care and retirement security.

Deep trouble requires decisive action. Congress in its wisdom is trying. But it's hardly enough. Even before we act, we have to agree on where we want to go. Here are the objectives we ought to be pursuing.

1. We need to get many of the 20 million-plus unemployed people earning again. Retail consumer spending and housing bubbles will no longer drive the economy, so we should accomplish this goal with a large capital infrastructure investment program. That will make us more competitive, which will make the whole economy stronger. And we can load up the infrastructure program with jobs.

2. Wealthy individuals and corporations should carry a fair share of the tax load. We need the revenue, and we need a tax system that is not twisted to benefit the rich.

3. We need incentives for state and local governments not to lay people off. We want those dollars and jobs pumping through our economy; if we choke them off, that creates blockages in the system, the economic equivalent of a stroke.

4. We need to reform Social Security and health care in its various forms so they serve those entitled to benefits but don't grow faster than the economy. I said reform, not destroy.

In sum: We should invest capital in our future and create jobs, insist the rich carry their fair share, size our benefit programs to our means, and, as we put people to work, plan to erase our operating budget deficit in five years.

I'm a crusty old budget director and I know how to balance budgets.

Unbelievably, what we did last decade was reduce taxes and increase spending — and then shut our eyes and pretend everything would come out OK. Now it's time to pay the piper and get back on track.

Avoiding a serious depression and carrying out the steps above require higher taxes. There is one, and only one, piece of good news in this brutal fact: The amount we have to raise taxes now to avoid a depression is much less than the later increase we will face if we keep on digging the hole into which we jumped through our own witlessness.

I'm not for abandoning the poor and the sick, or putting more people out of work rather than back into jobs. I won't support tax cuts for the rich while middle-class working folks carry the burden. I support Medicaid, Medicare and Social Security — but their costs cannot be allowed to grow so fast that they sink the whole ship.

There are smart ways to implement these objectives. But first we have to stop yelling at each other and agree on what our objectives are. The hour is late and the clock is ticking.

Also of interest: Your 2012 election voter's guide. >>

Peter Goldmark was president of the Rockefeller Foundation, publisher of the International Herald Tribune and New York state's budget director.

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