Friday, January 17, 2014

Our Nation's #1 Priority Must Become HIGHER ECONOMIC GROWTH and Increased Jobs ... How to Do It in 4 Simple Steps

Our economy is not growing at a rate nearly high enough to return to full employment, which historically has resulted in an unemployment rate of 5% or below.

Our anemic economic growth problems are severe and threatening to become long term in nature. Politically motivated minimum wage hikes accompanied by government mandated income inequality and redistributionist programs won't begin to solve the fundamental problem.

Besides, in order to afford to do these things and keep the basic entitlement programs we have now, we need a fundamentally new and realistic approach to economic growth powered by productivity gains and investment in the private sector. Growing the 'pie' instead of splitting it differently is the only way.

And that "pie growing" approach will require government officials to stop trying to solve our problems by growing government's piece of that total pie. We must stop playing the zero sum political game of income redistribution and begin playing in earnest the serious game of facilitating private sector investment and hiring.

So how do we grow America's economic pie by an acceptable amount and get to a state of full employment? While the answer is relatively simple, the road ahead is by no means an easy one. Lots of hard work and truth telling lie down that road for everyone.

A Business Short List for Growth has the head of the Business Roundtable's four step prescription for getting us back on the road to solid and sustainable growth:

"No matter the topic, the debate in Washington often comes down to whether we need more government funding for social programs or less spending to reduce the debt we leave our children. But this win-lose framing completely misses the one thing required to achieve both objectives: robust economic growth.

The simple fact is that if we want to control the deficit, preserve key entitlement programs, educate our children, grow jobs, and offer upward economic mobility for everyone, we have to get our economy growing faster. . . .

And make no mistake, economic growth doesn't happen absent private investment. This isn't complex economic theory; it's something we all know from our personal experience. Where there is investment—a new factory or distribution facility being built, a new store about to open, new software being installed—that is where new jobs are created. It is no coincidence that during this period of subpar growth, private capital investment as a percentage of our economy is at post-World-War II lows.

A growth agenda designed to drive investment in the U.S. has four basic elements.

First is the necessity for fiscal stability. . . .

Nothing will drive investment and growth like business tax reform. Today's capital markets are global. Investment flows freely and easily across borders to its highest returns. It should not be surprising that investment in the U.S. is running at such low levels when the rates at which we tax capital through profits are the highest among all developed countries. Fortunately, there is broad, bipartisan consensus that current tax rates on businesses of all sizes are too high. Tax reform also means removing barriers to bringing overseas earnings back to the U.S. A study published by economists Karel Mertens and Morten Ravn in the June 2013 American Economic Review shows that a one-percentage-point decrease in the average corporate tax rate would result in an increase in real U.S. GDP of between 0.4%-0.6% within one year. Any serious agenda for economic growth must begin with reforming taxes for all businesses—large and small.

Expanded trade is also key. Today, one of every five U.S. jobs is supported by international trade. To protect these jobs and grow more, we need to expand global trade and investment. . . . Today, we need to ensure that consumers, workers and businesses can all benefit from opening more foreign markets in Asia and Europe for U.S. goods and services.

The final pillar of this growth agenda must be fixing our nation's broken immigration system. America's unique competitive advantage has always been its ability to attract the best talent. We can't turn back on that now, not at a time when high-tech innovation is more important than ever. A successful overhaul of immigration law would create a larger pool of visas for higher-skilled workers, enact a new visa system for lower-skilled workers, offer a path forward for undocumented workers already living in the U.S., and allocate greater resources to strengthen enforcement and secure our borders. Done right, immigration reform can increase our economic growth rate, reduce our deficit and contribute significantly to America's future.

It's time to get focused on this short list. Economic growth isn't a blue state/red state issue—it's an American issue. It's within our power to create the investment, the jobs and the opportunities our country needs."

Summing Up

Focusing on growing the pie is completely different than slicing the pie differently and then having government decide who gets which pieces. More pie in total is the only viable answer.

And more pie for everyone is definitely attainable for all Americans, but for that we'll need to change our ways and let the private sector lead the way.

Additional private sector investment will help create more jobs and higher incomes, thereby leading to lower levels of unemployment and greater levels of prosperity for all Americans.

And as importantly, it will enable us to stop mortgaging the futures of our kids and grandkids.

It's not a political thing: it's an American thing.

Since we're all in this together, let's force our politicians to act that way.

And if they don't, let's get some new politicians who will concentrate on doing the right thing for all Americans --- GROW THE PIE.

Thanks. Bob.

1 comment:

  1. Our present form of government (corrupt) does not grow pies. It does throw pies though...into the face of the of the taxpaying citizenry!