Last week was another terrible, horrible, no good very bad week for the economy and the United States. New jobless claims rose to 428,000, the highest level in three months, with unemployment stuck at over 9 percent. 45 million Americans — 15.1 percent of the population – are now living in poverty, per the Census Bureau. Inflation rose 3.8 percent over the past 12 months and .4 percent in August alone, according to the Bureau of Labor Statistics. The president now seeks to impose a millionaires’ tax to balance the budget. Comedy Central’s Jon Stewart has branded Solyndra as the “custom-tailored Obama scandal.” To top it all off, like a rotten cherry, Ron Susskind writes that former White House economic adviser Larry Summers, told then-OMB director Peter Orszag that as far as economic policy, “There’s no adult in charge.”
Funny, back in March 2009, MIT (Summers’ alma mater) was hailing Obama’s economic advisers an economic “dream team”
It is time to bring in the grownups and reignite the economy. With that in mind, Mitt Romney’s economic policy proposals deserve a fair hearing. Romney would keep marginal tax rates at their current levels, which are otherwise scheduled to rise in 2013, while seeking to flatten tax rates over the long term. Romney would also push to lower corporate tax rates to 25 percent and bring them into line with the rates generally found in industrialized developed countries. Right now, the top corporate tax rate in the United States is 39 percent, while the average corporate income tax rate in the OECD is 25 percent. In a globalized economy, where capital moves faster than the blink of an eye, a 14 percent rate difference is huge.
But, getting the economy moving is not just about cutting tax rates. It is about reducing the role of government in the economy. Romney would seek to cap federal spending at 20 percent of gross domestic product (GDP). Under President Obama, the national debt has metastasized to $14 trillion, federal spending has risen to 25.3 percent of America’s GDP, and the annual deficit to 9 percent of GDP. Putting things in perspective, in 1988 federal spending stood at 21.3 percent of GDP, and was under 20 percent of GDP between 1997 and 2008 in all years but one. Obama has wrought change, but not for the better.
Another area that needs fixing is the current administration’s fixation with “green jobs” and “cap and trade.” Romney proposes increased oil and gas exploration, and clean coal. He also backs the Keystone XL Pipeline from Canada. With high unemployment in the United States, Middle East instability and high prices at the gas pump, Romney’s prescription makes sense.
In contrast and through the prism of Solyndra, it looks like the promise of green jobs was little more than an attempt to funnel taxpayer dollars to Obama Administration cronies and contributors. The facts speak for themselves. According to Tom Friedman, “There is only one effective, sustainable way to produce ‘green jobs,’ and that is with a fixed, durable, long-term price signal that raises the price . . . .” In plain English, it means that unless the price of traditional energy goes up-up-up, green jobs are a chimera, the St. Elmo’s fire of the Al Gore set. And in case anyone forgot, President Obama unsuccessfully backed a cap-and-trade scheme, which would have punished Middle America, the Midwest, the South and the Plains. Oh, and among cap-and-trade’s biggest supporters are Nancy Pelosi and Henry Waxman.
Romney also addresses the need for America to once again attract the world’s best and brightest. He would increase the number of visas awarded to skilled workers, and grant green cards to foreign students who graduate from our universities with advanced degrees in math, science and engineering. The result would be more job creators pursuing more innovation here at home instead of somewhere overseas.
Taken as a whole, Romney’s proposals are pragmatic solutions to America’s real problems. In the words of the Economist, Romney’s proposals are “quite sensible.”
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