Rand Paul's Plan to Save the Cities

Joe Conason

If Americans are divided today — and they are — the most obvious and pronounced divisions are between those who live in cities and those who don't. If you split America into two countries, one rural and one urban, you would have two very different nations — in philosophy, in governance, in economics, in liberty.

One of those Americas is functioning today. The other is a basket case — on life support, bankrupt, riddled with crime, hopelessness and poverty. Few politicians of either party have addressed this division or proposed specific policies to address it. It is undeniable that most cities are under the control of Democrats, while most rural areas are under the control of Republicans.

Democrats want to follow the same prescriptions they have been promoting for decades, the very ideas that have resulted in dysfunction: bailouts, higher taxes and more redistribution of wealth. Republicans, generally and surprisingly, don't have much to say about the mess created by the old, failing ideas of their political opponents.

Then along comes Sen. Rand Paul, R-Ky., with a bold idea delivered last weekend to the Detroit Economic Club: turning cities like bankrupt Detroit into "economic freedom zones." Depressed areas would see Washington lower personal and corporate tax rates, eliminate the capital gains tax and lower the payroll taxes for employees and employers, thus providing real incentive for entrepreneurs and businesses to invest, creating more jobs, stimulating real estate development and bringing people back to dying communities.

The alternative would be to follow the same old policies that got Detroit and other major cities into the predicaments they currently find themselves in.

"What Detroit needs to thrive is not Washington's domineering hand, but freedom from big government's mastery," Paul said. "The answer to poverty and unemployment is not another government stimulus. It is simply leaving more money in the hands of those who earn it."

Detroit recently became the largest municipality in the history of the nation to enter Chapter 9 bankruptcy. The city faces $18 billion in debt and long-term liabilities. Washington could bail Detroit out but it's unlikely it could bring Detroit back from the dead. Paul's plan very well could. Though Detroit's problems run deeper than economics, it's certainly worth a shot.

Paul plans to introduce the "Economic Freedom Zone Act of 2013? this week. It's not entirely a new idea. It's similar to the ideas promoted by Jack Kemp decades ago. But as Paul notes, it takes these ideas to a new level: "This is Jack Kemp's enterprise zones on steroids," he said.

"These zones free up Detroit to bail themselves out," Paul said. But it's not just for cities. Paul said the plan could help dozens of counties plagued with rural poverty, too.

"Right now any community with 12 percent (unemployment) or more would be eligible for these freedom zones," he said.

Is the plan a recipe for economic miracles in Detroit and elsewhere? Maybe. It's certainly not a sure thing. But does it make sense to keep doing the same thing over and over expecting different results? Certainly not.

America faces many serious problems today that run deeper than economics. But if we are ever to return America to the kind of freedom, prosperity and tranquility we once enjoyed, the one-size-fits-all, command-and-control dictates of Washington must be abandoned. There is no money for more bailouts, especially when they have proven not to work. It's a fact that you cannot tax communities into prosperity. And robbing Peter to pay Paul is an un-American idea and a hopelessly counterproductive measure for the kind of blight we see in Detroit.

Rand Paul should be applauded for his bold plan.

It will be interesting to hear whether Democrats are willing to free their constituents in the big cities and give them a fighting chance to come back.

To find out more about Joe Conason, visit the Creators Syndicate website at www.creators.com.