Blueprint for Recovery
July 12, 2011
Mainstream economists are waking up to the haunting reality that the rosy economic growth scenarios they had projected for 2011 were beyond delusional. According to the recent jobs report, unemployment rose to 9.2 percent for the month of June, the highest level this year. Housing also continues to falter, and to make matters worse, the Federal Reserve has downgraded its outlook on gross domestic product (GDP) growth for the next year, says Anthony Randazzo, director of economic research at the Reason Foundation.
So what can we do about it?
To address unemployment and GDP growth we should roll back America's regulatory environment and loosen trade restrictions.
- The United States' ranking has dropped for the third year in a row in the 2011 Index of Economic Freedom.
- Now in 9th place behind Hong Kong, Singapore and Denmark (and barely above Bahrain), America continued its decline due to reduced "Business Freedom" and "Trade Freedom."
We also should be pursuing more free trade agreements (FTAs).
- The pending pact with South Korea is expected to generate 50,000 to 100,000 new jobs as American companies gain better access to Korean markets.
- The recently negotiated free trade deal with Columbia would boost exports to the South American nation by 7 percent from Florida alone, and an FTA with Panama opens up a platform for U.S. businesses to increase their investment opportunities all across the Americas.
The housing recovery process can be moved forward simply by Washington ending its programs that aim to prop up prices. Changes are needed in monetary policy as well. A consistent strong dollar policy could make America a more attractive place for foreign investment.
These ideas represent the pillars of a blueprint that would greatly benefit the American economy. Recovery would not be immediate, but it would be stable and sustainable, says Randazzo.
Source: Anthony Randazzo, "A New Blueprint for Recovery," Reason Foundation, July 8, 2011.
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