I keep writing about how president Obama has no plan for restoring higher growth to the economy. Indeed, after we learned that the economy shrank during the first quarter of this year, I should amend that to say that Obama has no plan to restore any growth to the economy.
It is not enough, however, to just complain about the gross incompetence of Obama and his people. The GOP now has to agree on a plan of its own to help the economy. We do not need every detail; it is enough to give broad outlines. The actual changes can be made once the Republicans are in control in Congress. Here are the points which I believe the plan ought to include:
1. America needs to unleash its domestic energy industry. That means an end to unnecessary regulations that prevent responsible drilling for natural gas and oil. It also means an end to the Democrats' war on coal. The USA actually has a major advantage over other countries because with modern technology, we have ample low cost energy that could power us to major economic growth. Unleashing this potential could create literally millions of new jobs. We still need to protect the environment, but the knee jerk hostile response of the Democrats to all new energy production must end.
2. The incredible burden of government regulation on business has to be reduced. During the Obama years, government regulation has grown and grown to the point where it now stifles all sorts of economic activity. The latest example of this is the proposed regulation by the EPA to deal with water and wetlands across America. Ranchers who have an area of land that floods during heavy rains will now be subject to all sorts of EPA regulations for that land. Farmers with small streams that flow across their fields will also get hit by the EPA. Home builders with land containing wetlands will also need to comply with EPA regs. The problem, however, is that these sorts of waters and wetlands are state and local issues, not the province of the federal government, and the EPA does not even have jurisdiction over them. Nevertheless, millions of small ranchers, farmers and other businesses will have to comply with burdensome regulations from the EPA which will squelch all sorts of economic activity. A Republican Congress needs to limit the powers of the regulatory agencies and get many of the worst offending regulations removed.
3. The corporate tax structure of the USA needs to be revamped. Right now, America has the highest corporate tax rate in the world. Even worse, our laws are structured so that American companies can avoid all taxation from the federal government if they move their activities out of the country. Worse still, a foreign competitor of a domestic company can avoid nearly all taxation here as well if it structures its activities properly. Should America really operate its tax structure so that a Chinese equipment manufacturer can sell the same product as an American manufacture but only the American pays a 35% tax on all its profits? America has to compete around the world, and our domestic companies need not to be put at a disadvantage here at home. Furthermore, the special deals that let a company like the Obama-friendly General Electric earn 14 billion dollars but pay no taxes have to be ended. All American companies have to be treated the same.
4. Even before the final corporate tax structure is decided, there ought to be a one time holiday on the repatriation of foreign cash held by American companies. Right now, there is about two trillion dollars sitting in accounts around the world which American companies are not bringing home in order to avoid the heavy taxes that would result. Let's give them a year during which they can pay only 5% tax if they bring the funds home to use for investment or payment of dividends. This would likely bring in a huge amount of money to the federal treasury. Even better, it would likely mean additional investment in the American economy of literally hundreds of billions of dollars. this change alone could boost economic growth by something like 2-3%.
5. The federal government has to get rid of the burdens that Obamacare puts on business and individuals across the country. Obamacare has reduced jobs; it has reduced the growth of new business; it has reduced consumer spending as more money has been forced to be spent on healthcare; and it has not improved the healthcare services that most folks receive.
There are many more points that should be discussed, but these five are of critical importance. America needs to know that at least one party understands how the economy works and can take steps to provide relief from the never ending stagnation of the Obama years.
It is not enough, however, to just complain about the gross incompetence of Obama and his people. The GOP now has to agree on a plan of its own to help the economy. We do not need every detail; it is enough to give broad outlines. The actual changes can be made once the Republicans are in control in Congress. Here are the points which I believe the plan ought to include:
1. America needs to unleash its domestic energy industry. That means an end to unnecessary regulations that prevent responsible drilling for natural gas and oil. It also means an end to the Democrats' war on coal. The USA actually has a major advantage over other countries because with modern technology, we have ample low cost energy that could power us to major economic growth. Unleashing this potential could create literally millions of new jobs. We still need to protect the environment, but the knee jerk hostile response of the Democrats to all new energy production must end.
2. The incredible burden of government regulation on business has to be reduced. During the Obama years, government regulation has grown and grown to the point where it now stifles all sorts of economic activity. The latest example of this is the proposed regulation by the EPA to deal with water and wetlands across America. Ranchers who have an area of land that floods during heavy rains will now be subject to all sorts of EPA regulations for that land. Farmers with small streams that flow across their fields will also get hit by the EPA. Home builders with land containing wetlands will also need to comply with EPA regs. The problem, however, is that these sorts of waters and wetlands are state and local issues, not the province of the federal government, and the EPA does not even have jurisdiction over them. Nevertheless, millions of small ranchers, farmers and other businesses will have to comply with burdensome regulations from the EPA which will squelch all sorts of economic activity. A Republican Congress needs to limit the powers of the regulatory agencies and get many of the worst offending regulations removed.
3. The corporate tax structure of the USA needs to be revamped. Right now, America has the highest corporate tax rate in the world. Even worse, our laws are structured so that American companies can avoid all taxation from the federal government if they move their activities out of the country. Worse still, a foreign competitor of a domestic company can avoid nearly all taxation here as well if it structures its activities properly. Should America really operate its tax structure so that a Chinese equipment manufacturer can sell the same product as an American manufacture but only the American pays a 35% tax on all its profits? America has to compete around the world, and our domestic companies need not to be put at a disadvantage here at home. Furthermore, the special deals that let a company like the Obama-friendly General Electric earn 14 billion dollars but pay no taxes have to be ended. All American companies have to be treated the same.
4. Even before the final corporate tax structure is decided, there ought to be a one time holiday on the repatriation of foreign cash held by American companies. Right now, there is about two trillion dollars sitting in accounts around the world which American companies are not bringing home in order to avoid the heavy taxes that would result. Let's give them a year during which they can pay only 5% tax if they bring the funds home to use for investment or payment of dividends. This would likely bring in a huge amount of money to the federal treasury. Even better, it would likely mean additional investment in the American economy of literally hundreds of billions of dollars. this change alone could boost economic growth by something like 2-3%.
5. The federal government has to get rid of the burdens that Obamacare puts on business and individuals across the country. Obamacare has reduced jobs; it has reduced the growth of new business; it has reduced consumer spending as more money has been forced to be spent on healthcare; and it has not improved the healthcare services that most folks receive.
There are many more points that should be discussed, but these five are of critical importance. America needs to know that at least one party understands how the economy works and can take steps to provide relief from the never ending stagnation of the Obama years.
No comments:
Post a Comment