Economy Burdened By Weight Of Government
The Sacramento Bee
Op-Ed – Rep. Kevin McCarthy
February 10, 2012
President Ronald Reagan once said, "Status quo, you know, is Latin for 'the mess we're in.' " If he were alive today, he would probably substitute "Washington and Sacramento" for "status quo."
In recent weeks, Californians have heard our president and governor lay out their agendas for the year ahead. Regardless of our political philosophies, we all agree that the most critical tasks we must undertake are to grow our economy and get people back to work. However, where we disagree is how we achieve these goals.
Astonishingly, what we heard in both speeches can be distilled into a four-word summary: more of the same. The problem is that "more of the same" isn't just holding back our economy; it's hurting our ability to compete globally. Citing our persistently high unemployment rate, our exploding deficits and a declining public faith in government, a recent study released by World Economic Forum ranked America as the fifth most competitive economy in the world. Just three years ago, we were first.
Washington and Sacramento fail to understand that it's the policies of stimulus spending, over-regulation and tax hikes that are keeping our economy stalled. Washington has added $4.6 trillion to the national debt, and the national unemployment rate has remained above 8 percent for 35 consecutive months. Additionally, Sacramento has just announced that the state will be out of cash by March unless it borrows more money.
There must be a better way.
As a former small-business owner, I know that the greatness of our economy is owed not to government spending and intervention, but to a marketplace where entrepreneurs and small businesses are free to create, compete and succeed. I believe in a better way forward – one that unleashes our economy from the weight of government and makes America competitive again. We must begin leveling the playing field with foreign competitors by pursuing comprehensive tax reform, regulatory reform and a domestic energy agenda that utilizes all our domestic resources.
After Japan lowers its corporate tax rate April 1, America will have the highest corporate tax rate in the developed world at 39.2 percent. This hurts the global competitiveness of U.S. businesses. In order for any economy to expand and create jobs, the structure of that economy must be built to promote a vibrant private sector. I always say that structure dictates behavior, and here in America, where tax rates are high and the rules are complex, many businesses have – not surprisingly – been driven to more hospitable foreign environments. It is estimated that American companies have $1.5 trillion overseas. Our goal should be to bring that money back home to invest in our economy and create jobs.
Another area in which the United States and California must increase competitiveness is improving our regulatory environment. My experience as a small-business owner taught me that government regulations are more often a burden than a help for growing businesses. Each year, regulations sap $1.75 trillion from the private sector and cost small businesses an average of $10,000 per employee, according to one study. For small businesses already facing enormous uncertainty from the current economic climate, over-regulation has made their plight worse.
The president's regulatory overreach has placed our domestic energy security in jeopardy while costing thousands of American jobs that are now being shipped overseas. His moratorium on energy exploration in the Gulf of Mexico last year, and most recently, his decision to reject construction of the Keystone XL Pipeline, is costing America jobs. We need an energy agenda that embraces all of our domestic resources. Increasing our domestic energy production will grow our economy, create hundreds of thousands of American jobs, make us more energy independent and produce new revenues to fund needed infrastructure projects across the country.
Our current policies have led us in the wrong direction, and Americans expect more from their leaders. We need to head down the path of smaller government and individual initiative. Ronald Reagan kept a plaque on his desk that simply read, "It can be done." Now is the time to learn from the failings of big-government economics and rally around what's made us the strongest economy in the world – the freedom and opportunity to succeed. It can be done.