February 14, 2010
By Herman Cain
The president, his administration and most members of Congress still don’t get it! So let’s try to explain job creation another way. You stimulate the creation of jobs by reducing an employer’s cost to keep people employed (less taxes), and then by reducing the cost of a business to grow their business (less regulations). If these two things happen then jobs will be created.
Job creation is not a complicated phenomenon, but the president and the Democrats have been convinced that less taxes is bad, and more regulations are good. It’s just the opposite and there is plenty of historical evidence to prove it.
The Economic Report of the President was released last week by his Council of Economic Advisers. According to the Wall Street Journal (February 11, 2010), “the report offers few new policy prescriptions or economic forecasts.” In fact, the administration still believes it can rebuild the economy through health care legislation, clean-energy initiatives, infrastructure projects, and small-business tax breaks.
Representative Eric Cantor (R-VA) gave the most laser-like description of the report. “The Obama Administration’s report is full of blame for the policies of years past, praise for its own failed policies of the past year, and promises about their ideological agenda to grow government.”
Translation, the report is 400-plus pages of repackaged propaganda.
Of course the president restated his commitment to job creation, but most of the chatter from his administration and Congress about a new jobs bill is just another bunch of gimmicks that will do nothing to stimulate new job creation.
Just as “cash for clunkers” was a gimmick that did not work, the current offering of a $5000 tax credit to employers who hire an unemployed worker, plus a limited-time suspension of part of their payroll taxes are just propaganda gimmicks.
Here, again, are some of the real job creation policy suggestions that the president and Congress are not listening to:
Make the current tax rates permanent. The uncertainty of what will happen to tax rates at the end of this year has put businesses in a state of stop. Raising taxes will only make things worse.
Suspend the payroll tax for all workers for a year. This will be an instantaneous stimulus for all employers and all workers. The cost would be approximately the cost of the first stimulus, which did not work, but this one would generate increased tax revenues. And yes, it means the Social Security and Medicare train wrecks will come a year earlier, so start restructuring them now.
Stop the expansion of government and the expansion of federal spending! This would help to create some confidence with the public that the policy makers are finally hearing the people. Confidence is an economic additive to growth.
It is really not any more complicated than that. Stated another way, if government gets out of the way and remove tax uncertainty and regulatory uncertainty, a real economic recovery could get underway.
The president, his advisors and the Democrats in Congress can’t seem to get past their Washington beltway bubble, their insatiable quest for power, or their desperate desire to get re-elected. Even worse, they can’t let go of their political agenda to make government bigger and bigger, and tax us to death.
The citizen activist movement that is growing across this country is no gimmick. It is getting bigger and bigger, and promises to produce even more election surprises in November of 2010 similar to what happened recently in New Jersey and Massachusetts.
Maybe then they will get it.