The Republican presidential candidate debate last week was troubling to many swing voters. The rhetoric indicated that the campaign will be harsh and long until it is resolved at the Republican convention in 2012.
More credible positions need to be stated by the Republican presidential candidates, if voters are to have confidence in their ability to fix our economy. Positions on taxes, regulations and entitlement reforms need responsible and achievable solutions. In the meantime, our debt continues to grow.
People are not feeling good about where our economy is headed. They are unhappy with the choices among the Republicans, as well as the leadership of President Barack Obama. Both the Republican and Democratic parties are out of favor with many voters, because they are not cooperating on a bipartisan basis for the good of all our citizens.
A double-dip recession could come in 2012 unless job growth picks up. The stock market is down. The euro is falling, and some European economies are in deep trouble. America could be greatly affected by what happens in Europe. Our own deficit continues to grow, while too little is being done about needed Social Security, Medicare, Medicaid and other health care reforms.
First, tax rates need to be changed. We should decrease the long-term capital gains (investments held more than one year) to 10 percent. Short-term capital gains (less than one year) should be increased to 30 percent, to reduce speculation and also allow businesses to hold onto investments long enough to put their borrowed assets to work, updating their operations to create job growth.
The present federal income tax should be replaced with a combination of much lower overall rates, elimination of all loopholes, and a small national consumption tax on industrial and consumer sales, to make up for any revenue shortfall. Such a plan would make everyone pay their fair share of taxes to the government.
Second, to compete against foreign imports, businesses should not be required to continually raise wages and benefits, if this will make them non-competitive in the world marketplace. Businesses need to be freed from some of the regulations that make it difficult or impossible for them to compete with companies faced with less stringent requirements.
Regulations frighten investors, business owners and managers even more than higher taxes do. Businesses need to know what the rules of the game will be, and how they will be enforced, before they will be willing to invest in, and increase jobs, with or without other government incentives. Before they put their money on the line, they want to know exactly what risks they are going to be taking.
Government agencies have much duplication, confusion and waste in their regulatory control of private industries. One example is the set of regulations on eggs. The Food and Drug Administration enforces egg standards, including egg substitutes and what foods chickens eat, while the USDA’s Animal and Plant Health Inspection checks for disease-free standards on chickens. Then, the FDA checks on the egg shells. Why not consolidate these under one agency, so poultry farmers can know more clearly how their actions will be dealt with?
But instead of consolidating, Congress created a new Food Safety Modernization Act. Under it, the FDA will impose new regulations in the future. Added regulations and conflicting rules retard job growth. Over-regulation is costly and inefficient, to both private industries and government.
Third, our government should grow jobs by investing in new infrastructure projects; especially roads, highways, high speed train lines, energy plants and updated school buildings.
Lastly, people do not like the bickering between the president and Congress. Both sides are playing politics instead of reducing their arguments and working seriously to improve the economy. Health care, education policies, debt, deficit reductions and illegal immigration politicking are of great concern, but just talking about them isn’t going to solve anything.
Right now, we need to set the stage for job creation, by agreeing to reduce uncertainty for employers. They need to have a stable set of expectations about what government will demand of them. In addition, they will need job-ready potential employees, with skills in the positions the businesses are looking to fill.
Class warfare should not continue. Who really is defining wealthy, middle class or poor? Wealthy and middle class people pay a great deal of IRS taxes, while almost 45 percent of all households pay nothing.
Republicans and Democrats must put politics aside and serve our citizens’ concerns. Together we can prevail; otherwise we will fail the economy and each other.
— Bernard Featherman is a business columnist for the Journal Tribune and former president of the Biddeford-Saco Chamber of Commerce.
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