This fall Washington state voters have a chance to change the course of the state.
With the approach of the next legislative session in January, the state is faced with a $3 billion shortfall. The state has had a spending problem for as long as we have had a one-party power government in Olympia. There are too many regulations on the job creators, while the government continues to start new programs and increase many outdated and ineffective programs already in existence.
In my retirement, I spend time studying history and have come to some conclusions about government. What this state and the federal government needs, more than anything else, is a Calvin Coolidge moment. We need less government and less regulation.
We have a spending problem and not necessarily an income problem. Government is no different than your personal household. You can't spend more than what is coming in. Here is why we need a Calvin Coolidge approach to government. Most of my thoughts were developed after reading three books: "Silent Cal's Almanack" and "The Years of Six Presidents," both written by historian David Pietrusza, and "The Forgotten Man" by Amity Shales, senior fellow at the Council of Foreign Relations.
Most people don't realize that in real terms we had a worse depression in 1919 than in the '30s. President Warren Harding inherited this issue from the Woodrow Wilson administration. Harding died in office and Vice President Calvin Coolidge became president in August 1923 and served until 1928. His approach to governing was to let the people fix the problems not the government in D.C. Big government is the cause of most problems. Government is too big and self serving. Bureaucrats love telling people how to live and what is good for them, and when you are spending someone else's money it is easy to waste it. When President Wilson came into office the income tax rate was 7 percent. When he left office the marginal income rate on the wealthly was 77 percent.
Coolidge was more of a libertarian than anything else. After he became president he actually shrunk government by a 50 percent cut in spending. By cutting taxes on businesses, employers increased hiring and expanded business. The unemployment rate dropped to 3.3 percent, Gross National Product rose 7 percent and personal income increased by 30 percent. He cut taxes six times and took the marginal tax rate from 77 percent to 25 percent and by 1927, 98 percent of the population paid no income tax.
In 1923 the national debt was $22 billion and by 1929 it was down to $17 billion. The Roaring '20s was a result of the government being downsized and letting the people create wealth. People create wealth not government. The common man prospered in the '20s. When Coolidge left office 50 percent of the country had electricity. There were three times as many cars. Federal spending was cut by 50 percent, and we had low unemployment and no inflation. Most homes acquired time-saving appliances, which allowed women more free time to pursue other interests.
The Great Depression of the '30s was caused by the passage of the Smoot-Hawley Act, a tariff on thousands of imported goods, over the objection of Coolidge. This caused insecurity in the business sector and the economy collapsed.
Now, what the next Legislature needs to do is to follow some of the principles of Calvin Coolidge and study a little history. Cut spending, cut regulations and allow the economy to grow.
Washington state is facing a $3 billion shortfall in the next biennium. The Legislature will be tempted to raise taxes, fees and cost of licenses while not cutting spending which will further depress our economy. In the last 10 years, the population of Washington state has increased by about 9 percent while our budget has increased by 30-plus percent. This can't go on.
We need to study history and take some of the lessons of the past to fix problems in the future.
Jerry Finch is a retired grocery store owner who served two terms as District 2 Whitman County commissioner.
