Are we heading for political party compromises or detrimental gridlock in government this year? We live in a real world, where fast and loose spending beyond one’s means doesn’t fly very well, in today’s economy.
Many of us are sick and tired of hearing the class war syndrome of poor against rich, espoused by far left liberals and progressives. Certain people seem to blame anyone who works hard, earns the fruits of their labor and grows wealth from it. What we need is to focus on growing jobs, not political garbage words. We need to sustain our recovering economy, and we need to work to reducing the huge deficit. The most important issue facing America today is creating jobs. In times past, a 5 percent unemployment figure was normal. But these are not normal times, so we can expect unemployment to continue, in the 9 to 10 percent range in 2011. With such high unemployment numbers, it could be tough to get our economy improving.
Banks can help, by providing more bank loans at low interest rates to small businesses, so that they can create more jobs. Export trading also should be encouraged by our government, by inducing more manufacturers to go on overseas trade missions visits to build sales, leading to more jobs. If unemployed people want jobs, many will have to re-educate themselves by learning new skills for future job opportunities. Special incentives should be given to small businesses, through government subsidized grants, that will cover three month’s payroll for each new hired employee, in return for the business’s guarantee to employ that new employee for at least one year.
Here are things we need to do. Payroll taxes for employees should be reduced. The 1099 provision slipped into the health care Bill requires companies, mainly contractors and small businesses, to report to IRS payments of more than $600 a year to any vendor. It should be eliminated, as it is too excessive in costs of time, paperwork and money, both for government and for businesses.
We need to simplify the tax codes, too. Most anti-business regulations must be reduced or eliminated by government agencies. Many federal government regulations are unfair and place financial hardships on most small businesses. Government can more efficiently get its desired rules and regulations adhered to by businesses, by giving incentives to invest in jobs, equipment or facilities, rather than through fines and other punishments.
A political gridlock in Washington, D.C. is not good for the economy, either. The GDP could grow up to 4 percent this year, but there are some negatives that could prevent this from happening. Housing sales have stalled. Home prices are down. Interest rates will likely rise, if inflation sets in. Food prices have increased. The nation’s political system has been corrupted by earmarks, entitlements and ineffective government programs that need to be eliminated. In order to get our economy moving again, we must get control of runaway spending. The deficit we face will be here to haunt our children and grandchildren. Soon, even our home mortgages will be owned by Chinese, Indian or Russian banks. And our once-praised standard of living will have fallen to new low levels.
This huge deficit facing our nation will take years to solve. It would probably take seven to 10 years, even if the new Congress imposes drastic cuts. We need our economy to turn around, even if it only rebounds slowly. We need the two wars we are in to wind down.
The stock market looks as if it will continue to grow. But over the next year or two, a lot of cities and states will face bankruptcies, unless austerity measures are enforced quickly. Fewer services and more taxation on its citizens will result. Our present debt is over $14 trillion and growing. The government has to stop spending, control expenses, and reduce the size of government, and eliminate unnecessary programs.
The new Congress comes into power in January. It will have a strong hand in changing the direction of spending and reducing the deficit. Compromise and cooperation by both political parties will determine job creation, but only if both sides are willing to make reasonable concessions.
Like my father used to tell me when I would ask him what was going to happen in the coming year, “I wish it was 12 months from now, so I’d know all the answers.” This time next year, we will all know if the politicians put the public’s well being above their own need to posture and pontificate.
— Bernard Featherman can be reached by e-mail at bernard@featherman.com.
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