Both County Party Chiefs Are Wrong About the Economy
Good grief! I've read the columns by Bob Levy and Jim Heim (Aug. 22) and they're both wrong! No wonder our political system is in trouble.
Bob Levy, Republican county chairman, wants to create jobs by withdrawing from our international trade agreements, restricting imports and raising tariffs. In other words, he wants to start a trade war.
Bob, do you think our international trading partners will stand idly by and not retaliate against American exports? Throughout history, free trade has been good for America. Companies that are protected from competition become bloated and weak and lose their ability to compete. History is replete with examples of this. A good Republican like you ought to know that.
As for Jim Heim, the Democratic county chairman, his solution is to create jobs by raising taxes on "the wealthy" (including small business men), extend unemployment benefits, expand the food stamp program and prop up state governments' excessive spending with more excessive spending by the federal government. If there was ever an unimaginative set of proposed solutions, this is it.
Then he wants to set up a new WPA (more government jobs) and implement trade restrictions (one of those rare moments when a Democrat agrees with a Republican). In short, he wants the federal government to spend-spend-spend its way out of the predicament it has gotten us into by too much spending. What happens if a second trillion-dollar "stimulus" doesn't work any better than the first one? Do a third one? Where does the money come from for that?
If the federal government really wants to do something to create jobs, here are some suggestions:
First, get the federal budget under control. Congress could start by announcing that it plans to approve the Deficit Commission's recommendations when they're finalized in December. Because of the commission's bipartisan structure, any recommendations it makes must be bipartisan in nature. And virtually anything it recommends will be better than doing nothing, which is what many of us fear.
The capital markets fear this too, which is why the stock market is languishing at a time of strong corporate profits, and why businesses aren't borrowing and banks aren't lending. How can investors and businesses be optimistic when the government is borrowing 40 cents of every dollar it spends and is projecting trillion-dollar deficits as far as the eye can see? If the government sent a clear signal that it's getting its fiscal act together, you would see a huge spurt in economic activity.
This includes getting control of entitlement spending (Social Security, Medicare and Medicaid). Politicians are afraid to do this, fearing retribution by the voters. However, the American people are a lot tougher than the politicians think we are. Real people understand that these programs are out of control and need to be reigned in.
And this includes repealing the new health-care program, which adds a huge new entitlement program on top of the ones that are already out of control. In the past, the "Greatest Generation" showed its toughness by simultaneously conquering the Depression and our enemies in World War II. Do you think we could cope with a small cutback in our social programs?
Second, the Obama administration needs to make it clear it is ending the war it has been waging on business. We need a positive, productive partnership between government and business, where the government supports business and doesn't think it's the enemy.
They should start with some pro-business tax changes. For example, don't raise taxes on small businesses when you're trying to encourage them to expand and hire. Also, implement an accelerated multi-year write-off of businesses' capital investments. They could encourage innovation by eliminating unnecessary regulations.
It currently takes an average of five years to get a new patent approved by the U.S. Patent Office. Talk about stifling innovation! If you want businesses to expand, grow and create jobs, start supporting them and remove the impediments the government has put in their way. This isn't rocket science.
Once the government gets religion on its deficit problem and begins forming productive partnerships with business, the economy will begin to turn around. Then just stand back while the stock market soars, businesses expand and jobs are created.
Finally, the government should implement a new tax system that doesn't discourage success and encourage government overspending. My vote would be for a "flat tax" system, with no deductions other than for charitable giving. That would be fairer and less painful and would allow us to greatly simplify the tax code and eliminate the IRS.
I think the American people understand these things, and they're getting ready to demonstrate it in November. I have great faith in the American people.
John Rowerdink lives in Pinehurst.
More like this story