Restoring America's Growth
September 28, 2010
The 2010 election fight is about uprooting Washington's antigrowth mindset regarding the role of federal government. If post-election Washington finds the backbone and procedures to spend less and return power to the people, their businesses and states, capital will rush back into the United States, providing the jobs and investment needed to compete globally. Many of the steps needed to strengthen the economy, create jobs and attract global capital are clear, says Forbes Magazine.
Cut wasteful federal spending.
- With $3.8 trillion to choose from, the starting point should be such favorite pets as earmarks and the $6 billion annual ethanol subsidy.
- Cuts like this would likely pay America 10-to-1 through capital inflows as the United States improves its scorecard.
Corporate tax reform.
- The U.S. has the second-highest corporate tax rate in the developed world.
- A lower rate on a broader base would significantly improve our scorecard.
Small business credit.
- Washington has erected massive regulatory systems to channel capital from banks to Washington instead of to small businesses.
- Savers lose through the low interest rates paid by Treasury, banks lose in terms of lending skills and profit, and the nation loses when small businesses don't hire.
- The federal government has substantial influence on state and local pension systems through accounting rules, taxpayer subsidies and open-ended guarantees.
- State and local governments should be pushed to shift toward a federal-style 401(k) pension system.
Also, current tax rates should be extended. This would encourage profit and new business innovation, adding investment and jobs, says Forbes.
Source: David Malpass, "Restoring America's Growth," Forbes Magazine, September 27, 2010.
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