Forbes Addresses Economic, Political Issues
Business magazine editor and former two-time Republican presidential candidate Steve Forbes addressed several of his key campaign issues - the economy, lower taxes, and social security and education reforms - at the President's Forum Lecture Thursday, April 27, at the Ferrell Center.
The president and CEO of Forbes Inc., and editor-in-chief of Forbes magazine since 1990, the well-respected financial journalist and international business leader outlined his principles for keeping America's economy - and the world's economies - strong in the 21st century.
Principles for economic success
Forbes spoke of his five basic principles for economic success that would allow the U.S. and other nations to avoid the economic disasters of the 20th century, including the Great Depression and the World Wars, and to create an environment where businesses and the economies of the world could grow and prosper.
His first principle, labeled the rule of law, calls for individual equality before the law and for the right to property ownership. This allows for entrepreneurship and risk-taking to occur, he said.
Forbes stressed his second principle as the need for sound money. He explained that countries, with the guidance of the International Monetary Fund, increase and decrease the value of their money each day, a practice that Forbes is quick to criticize. "This causes inflation and makes it hard to conduct business," Forbes said. "You don't change the size of the ruler each day."
The third principle Forbes discussed was taxes. "Taxes are not just a means of raising revenue," he explained. "They are the price you pay for being successful." Forbes said as the price of producing a good increases, production will decrease. He wants to see taxes decreased so that people will be able to produce more goods.
Forbes listed his fourth key as absolutely no bureaucratic interference on being able to start up and run a business. He mentioned situations in countries such as Russia and Latin America where crime bosses decide whose business will prosper and whose will fail. The final principle, he said, was to remove all trade barriers to doing business.
The flat tax
A crusader against the current income tax system, Forbes received the most applause from the audience when he talked about his call for a flat income tax which would, he said, simplify the tax code.
"Our Declaration of Independence is 1,300 words. The Constitution is 5,000 words. The Bible, which took a few years to put together, is 783,000 words," Forbes said. "The current Federal Income Tax Code is 7,500,000 words. And nobody knows what's in there. Even the IRS doesn't know. But everyone knows it's unfair and dishonest."
Forbes' popular flat tax plan, which he said would eliminate the 5-billion hours a year Americans spend filling out their tax forms, calls for a $13,000 exemption for every adult in a family and a $5,000 tax exemption for every child. Any money made above the exemption level would be taxed at 17 percent.
"There would be no capital gains tax and even no death tax. You could actually leave this world unmolested by the government," he quipped.
Other campaign issues
Addressing other issues his campaign brought before voters, Forbes discussed the benefits of giving Americans back choice in trouble areas like social security, health care and education. Calling it "real capital for real people," Forbes talked about a new Social Security system of personal retirement accounts for young people, medical savings accounts and putting patients in charge of their own healthcare, and parental control of education - including charter schools, educational savings accounts and opportunity scholarships for children trapped in failing inner-city schools. Putting parents in charge of choosing schools, he said, would increase accountability and therefore performance.
But how to make these things come to pass?
The United States is entering into a crucial information age, he said, comparing our current growth - such as in the high tech sector - to that seen in the 1920s with the increased mass production of the automobile.
"The microchip is making us all brighter and smarter," Forbes said. "The true source of wealth in a society is not physical, but metaphysical. It is the human mind."
Progress can create problems, but there is an advantage of a strong democracy and a "strong moral foundation, knowing right from wrong," Forbes said. "We have an extraordinary capacity to recover from our mistakes. Looking back 100 years ago, we see what good can be done and what can happen when people don't adhere to their principles."
He also urged students and other audience members to "do their part in the political arena" if they want to effect change.
At the end of his lecture, Forbes answered audience questions, in a session moderated by Baylor President Robert B. Sloan Jr. The questions, submitted at a table as the audience entered the Ferrell Center, addressed such topics as trade relations with countries with poor human rights records, government regulation of the Internet, Middle East peace, attacks on a candidate's personal life, and running a campaign as a "Washington outsider."