Boosting the Economy Isn't Rocket Science
If you want to get everyone riled up, say you’ve got a plan to boost the economy. Whatever it is, half the people will say you’re a genius and the other half will call you a Kool-Aid drinking zealot.
My question is, how can simple economics be so controversial and divisive? This isn’t complicated. Boosting the economy isn’t rocket science. It’s simple, really. At least my plan is.
Once you get past the business and economic fundamentals and some simple math, it all comes down to incentivizing the right kind of behavior in government, corporations, small businesses and individuals.
Don’t get me wrong, I’m not saying it will be easy to execute. Nothing involving this crazy country ever is. But it’ll work. And it won’t just turbocharge the economy; it will reduce the national debt, as well.
Granted, it’s a little short on details, but that’s the whole point. We’ve been over and over this for years. Enough with the conversations, the debates, the analysis paralysis. Quit squabbling over percentage points and just get it done.
If you want lasting prosperity, this is how you do it.
Repatriate off-shore capital
American corporations have $2.1 trillion parked overseas to avoid being taxed twice, and an onerous tax at that. Allow a one-time repatriation at a low flat rate, including incentives to invest it in U.S. jobs, especially manufacturing jobs.
I bet you didn’t know that Foxconn has nearly 800,000 Chinese workers dedicated to Apple products alone. If you let Apple bring the money home, the right incentives could also bring some of those jobs home.
Talk about low hanging fruit to boost the economy; fruit doesn’t get any easier to pick than this. It’s simply ludicrous that we haven’t done it yet.
Give businesses a break and deregulate
Federal regulations are the gifts that keep on giving. Year after year, thousands of rules are added and few are ever repealed. 2015 was actually a record year, with 3,378 finalized and 2,334 proposed rules and regulations totaling 81,405 pages, according to the Competitive Enterprise Institute, a libertarian think tank.
If you’ve never run a small business or been a corporate executive, you have no conception of the overhead cost of compliance in terms of lost profits and capital. Regulations also act as headwinds that impede revenue growth. In other words, they impact the top line, the bottom line and the balance sheet.
Onerous rules and regulations are holding us back. Period.
Implement a simple flat tax and close the loopholes
This is so obvious it’s almost embarrassing. All you’ve got to do is implement a simple flat tax (maybe there are two tiers, whatever), shred the 70,000 page tax code and close all the loopholes, dismantle 99% of the dreaded IRS and put all the lobbyists out of work.
You know all the crony capitalism everyone whines about; all the special interests and lobbyists? They only exist to lobby for preferential legislation, regulation and taxation. If you put a stop to all that nonsense, you end the crony capitalism once and for all.
Reform entitlements … finally
Yes, it’s a third-rail issue, but it has to be dealt with, and sooner rather than later. The more we drag this out, the worse the problem gets. Today, more than half of Americans are on some sort of government assistance. At a minimum, we need to overhaul all those systems to eliminate fraud and abuse. That’s the first order of business.
The next step is to look at means-tested federal assistance programs, aka welfare, and make sure that none of them incentivize able-bodied Americans to choose not to work. Nobody wants children, the disabled or the elderly to starve, but we have to distinguish those in need from safety nets that keep workers out of our ever-shrinking labor force.
Lastly, we should consider taking grossly inefficient government bureaucracy out of the picture entirely and privatizing Social Security and Medicare. That will also keep our retirement funds out of the hands of politicians who apparently can’t help but spend it on other programs.
Outsource and privatize federal agencies
The executive branch of the federal government is completely out of control. Considering the dozens of departments and agencies, no wonder we can’t do anything efficiently. Washington has its hands in everything from healthcare and commerce to education and energy.
Simply put, we’re overextended and broke. We owe $19 trillion and every administration adds more departments, spending, layers of bureaucracy, and rules and regulations that drag down the economy. Most of those agency functions should be controlled by the states or outsourced and privatized. That will simultaneously boost the economy and pay down the national debt.
Look, I didn’t say any of this would be quick or easy, but then, nothing important ever is. It took thousands of politicians decades to get is into this mess, and it’s going to take the will of the American people, new leadership in Washington and a lot of hard work to get us out of it. If we don’t start now, then when?