JASON’S 5 POINT JOBS PLAN
Jul 6, 2016
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Jason Lewis 5 Point Jobs Plan:
Eight years into President Obama’s ‘American Recovery and Reinvestment Act,’ the United States is still suffering through the slowest ‘recovery’ in modern times. Median wages are stagnant; the labor force participation rate is at its lowest in 40 years; and GDP growth during the Obama era hasn’t hit 3%. In fact, growth for the 1st quarter of this year was an anemic 0.5%.
A faulty ‘official’ unemployment rate masks the fact that 95 million Americans are no longer working and those that are face skyrocketing Obamacare insurance premium hikes. Today, families are still one paycheck away from disaster. It’s time for a new course of economic freedom and prosperity. One that history - from Kennedy to Reagan - has shown will succeed, if we only have the courage to change course.
Here’s the real road to recovery:
1) Reform the Tax Code
As you can see from the graph, the Kennedy and Reagan tax cuts from the ’60s & ’80s unleashed a torrent of economic activity. Even when Newt Gingrich forced Bill Clinton to compromise on spending and tax relief, growth followed suit.
Today, our tax code is riddled with special interest loopholes for the well-connected and punitive rates for those who are not. The net result is a small pass-thru Minnesota business owner can face a total marginal tax rate of 60%. That’s why tax reform is priority number one when it comes to jobs.
We also have the third highest top corporate income tax rate in the world, at 39 percent. Because of that, trillions of dollars earned overseas stays there because the US is one of the few countries that taxes foreign profits if they are ‘repatriated’ for job growth and investment back home. Corporations like Medtronic are even doing ‘tax inversions’ to avoid America’s stifling corporate taxes.
All of this is why I support the Tax Code Termination Act, which would sunset the current code and force Washington to start over with a flatter, fairer tax code.
2) End the Regulatory Juggernaut
In May, when job growth was the slowest in five years, the Department of Labor unveiled two new job-killing rules. Its new overtime edict takes away the needed flexibility for employers and employees in small businesses by arbitrarily classifying salaried workers as those who make $47,476 or more per year. The Consumer Technology Association says the cost to start-up enterprises that rely on entry-level management positions will be staggering.
The DOL’s ‘fiduciary’ rule seeking to declare commission sales as a defacto ‘conflict of interest’ for anyone giving investment advice will severely shrink the incentive for production in that sector. Pay for performance is the hallmark of American productivity and having the federal government set compensation models is a road to ruin.
Add to these the onerous new rules from ObamaCare, the EPA, Dodd-Frank, and the National Labor Relations Board, and the Competitive Enterprise Institute reports a ‘hidden regulatory tax’ of $1.88 trillion on the back of the US economy. Indeed, the Federal Register now contains over 82,000 pages, the most since 1936 - dictates that are strangling America’s job-making machine.
We need to cut regulation and red tape so small businesses and entrepreneurs can thrive.
3) Fix the Fed
The Fed Oversight Reform and Modernization Act (FORM Act) is a good start for getting transparency within our central bank. But more needs to be done. We are awash in $4 trillion of easy money and yet plagued with a ‘credit crunch.’ Not all of it is the Federal Reserve’s fault, as demand for capital has shrunk due to spending and regulatory mistakes.
However, simply creating ‘bubbles’ in tech stocks, housing, commodities, and bonds does nothing to alleviate the underlying economic crisis. In fact, these ‘boom and bust’ cycles exacerbate it. Not only has the Fed run out of tools, but artificially low interest rates encourage malinvestment and the buildup of unsustainable debt levels which act as a major drag on economic recovery and job creation. They’re also wreaking havoc on a generation of savers on fixed incomes.
‘Independent’ central bankers cannot make up for bad fiscal policy by monetizing deficit spending - and ‘quantitative easing’ is no substitute for a sound dollar. The Fed’s mission should return to its historic and primary goal of a stable currency so that investors can be reassured that a dollar tomorrow will be worth what is today.
4) Stop the Stimulus
The main reason for the dangerously accommodative monetary policy is federal deficit spending, especially as it pertains to President Obama’s failed $830 billion ‘stimulus’ program. The only ‘shovel ready’ jobs created were apparently those to pay people to dig ditches and others to fill them up. But whether it’s the so-called Recovery Act, cash-for-clunkers, or a ‘bridge to nowhere,’ government make-work adds little to the nation’s productive capacity and can never replace the efficiency of private capital investment. In fact, it crowds it out.
In 2008, economist Gerald Scully, writing for the National Center on Policy Analysis, estimated for the period from 1960 to 1990 government “expenditures were about one fifth as productive as real private capital.” The result is a lower standard of living for everyone.
Propping up zombie companies with corporate bailouts and subsidies prevents markets from clearing and real recovery from starting. After eight years of profligate tax and spending we find ourselves with record debt, fewer jobs, and permanently slow growth. You can’t tax, spend and borrow your way out of a tax, spend and debt crisis. It hasn’t worked.
5) Level the Playing Field for American Labor
American labor has been besieged by foreign competition that doesn’t have to comply with Washington taxes and rules. International deals that used to embrace low tariffs and free trade now more closely resemble our byzantine tax code with a myriad of special interest carve-outs enforced by out of touch multilateral organizations. Congress must scrutinize all trade agreements to ensure the best interests of American workers are taken into account.
Worse yet, our current policy of subsidizing low-skilled illegal immigration actually suppresses American wages and benefits. Medical, educational, and even welfare benefits for US born children of illegal immigrants cost state and local governments billions. They also cost good-paying jobs.
As the Center for Immigration Studies points out, “most means-tested anti-poverty programs are open to low-wage workers…and the higher welfare spending on immigrant households compared to native households is not due to a lack of work among immigrants.”
Our door should be open to skilled immigrants who can live independent of America’s growing welfare state - but not to those who wish to join it.