Creating jobs, growing the economy, and balancing the budget are like three balls in the air. It is not so hard to toss one at a time and catch it. For some, tossing two is feasible, but for only the best is juggling three balls possible. Our Washington representatives (both houses) can not agree on how to toss one ball.
Representative Paul Ryan, a Republican from Wisconsin, told an NPR interviewer that he has talked to hundreds, maybe thousands of “job creators” in his home State on how to create jobs. Ryan said they told him to lower their taxes and eliminate most of the regulations they face. Seems pretty straight forward.
Of course this is a game of you lower my taxes and reduce these regulations first. Then, (I will love you in the morning) I will hire more people.
For such an intelligent person as Ryan, to try and sell such a line belies his real belief in American citizens’ gullibility. While I personally don’t think the solution lies in less regulations and lower taxes, I’d be willing to award both to those who created new jobs.
Of course the issue cannot be no regulations or no taxes, it should be about what is a reasonable level to protect all Americans and still provide a climate where business growth flourishes. But where is that point?
The only regulations businessmen endorse are those that exclude competition and/or provide an unfair advantage to them. This is human nature. You do not put the fox in charge of guarding the chicken coop.
Rules that apply to everyone do not lead to lack of competitiveness unless they cause companies to price their products or services so high that customers choose to go without, or foreign sources are able to supply at a lower cost. Taxes are an obvious example of where the playing field should be made as even as possible. Corporate taxes at some lower rate, say 20% with no loopholes, exemptions, or deductions would make sense.
Representative Ryan explained his position quite clearly and sincerely. The amazing part was he never hesitated when the NPR interviewer pointed to a recently released CBO study showed a three fold (275%) increase in the top 1%’s income over the past three decades. Tell me again what’s so bad about these taxes and regulations, and why jobs are not hanging off every tree?
The most direct answer to the current jobs question is low demand. Low demand, in turn, stems from reduced global economic strength (feel a circular argument underway?) and lack of US middle class buying power, And why the lack of middle class buying power? Well, the middle class is tapped out. For the past 40 years middle class wages and salaries have not kept up with productivity gains. They just don’t have the money, it has all gone to the top 1%.
Our country must be patient and not do anything foolish. No sensible businessman will hire unless there is demand for his products or service regardless of what Representative Ryan says.
Regulations should be reviewed and frivolous ones eliminated, The tax playing field should be leveled for all businesses while still producing important tax revenue. Government stimulus, especially for education and infrastructure should be used in target areas but in moderate doses. In short get ready for demand to return.
The most important changes that could be made today lie in reforming the income tax code and the corporate tax code. In both cases, all loopholes and exemptions should be removed first. For the income tax, new progressive rates should be selected that reflect the current income distribution realities (the 47% who pay no income tax and the enormous wealth of the top 1%). For corporate taxes, first no exemptions or loopholes, then rates should be set (1) with the eye to global competition and (2) the goal of returning good wages to the middle class. (For example, incentives could be envisioned that guides top executive’s remuneration to some maximum ratio of the average non-management employees.)
I am smiling as I write this. If the GOP can’t juggle even one ball fairly and correctly, how could they juggle this one?