Romney's economy-centric jobs plan
Updated 12:07 a.m., Saturday, July 14, 2012
Three years after the end of the Great Recession, unemployment sits at 8.2 percent - 3.2 percentage points higher than at the beginning of the recession. Three years after the end of the 1981-82 recession, unemployment stood at 7 percent - 0.2 percentage points lower than at the start of the recession.
Both recessions had roughly the same duration, occurred at the start of new presidential administrations, and saw unemployment rates reach 10 percent. The difference between the two recoveries was how each president approached job creation.
While government does play a role, the economy is largely the aggregation of all businesses and consumers who engage in commercial activity; therefore, jobs are most efficiently created through policies that incentivize businesses and consumers to engage in more activity. Government-centric methods simply crowd out productive economic actions.
Mitt Romney's 59-point plan is akin to Reagan's approach, focusing holistically on tax, regulatory, trade, energy, labor, human capital and fiscal policy that eliminates uncertainty and strengthens incentives to invest and consume. Current tax, regulatory and immigration policy has created too many unknowns such that individuals and business leaders are hesitant to invest or expand.
Romney's tax-policy plan reduces rates for both corporate and individual income taxes and simplifies the tax code. In the six quarters that followed the enactment of the Bush income tax cuts, U.S. gross domestic product grew by 4.1 percent - compared with 1.7 percent for the six quarters before the tax cuts. Putting more money in the hands of individuals and businesses enables Americans to both invest and spend more.
On Jan. 1, the Bush tax cuts will expire, which will result in one of the largest tax increases in U.S. history, costing taxpayers 2.5 percent of U.S. GDP over 10 years. Romney's tax plan, which would make the Bush tax cuts permanent, not only eliminates such tax-rate uncertainty for individuals and small businesses, but also gives middle-income taxpayers incentive to invest further. According to a study conducted by economist Arthur Laffer, taxpayers spend a little over $400 billion annually to comply with the tax code because of its sheer complexity; simplifying the tax structure will put this money back in taxpayers' hands.
Too many and too burdensome regulations choke the economy. Romney plans to repeal and replace Obamacare and the financial reform bill Dodd-Frank, which both impose job-killing provisions. Obamacare imposes an employer mandate to provide health insurance, which will discourage small businesses from hiring beyond 50 employees. Dodd-Frank creates a new regulatory agency, the Consumer Financial Protection Bureau, which will stifle bank-lending opportunities.
The president has approved 177 "economically significant" regulations - rules that affect the economy by at least $100 million. Romney will systematically review all current regulations and reform or eliminate those that have a significantly negative economic impact. This will work toward eliminating unnecessary federal regulatory red tape that the Small Business Administration estimates costs businesses and individuals $1.75 trillion annually, thus saving Americans both time and money.
Romney will restore U.S. energy security by streamlining the permitting process, approving the Keystone pipeline, and promoting an "all-of-the-above" energy approach. Lifting the Gulf of Mexico drilling moratorium will restore roughly 19,000 jobs; Keystone is expected to create around 130,000 jobs; additional oil and gas extraction could create almost 1.5 million economically resilient jobs; enabling the Nuclear Regulatory Commission to review competing reactor designs will kick-start the stalled nuclear energy industry. Romney will foster and grow the existing energy industry by opening up the United States' vast natural resources and directing investment to research and development of new technology that shows a demonstrable feasibility of success.
The economy cannot grow by itself - it requires the ingenuity of skilled workers and entrepreneurs. Romney's jobs plan calls for an investment in the critical human capital by raising the work visa caps on highly skilled immigrant workers and streamlining the permanent residency process for foreign graduates of American universities who graduate with advanced degrees in math, science and engineering. Legal immigrants make up only 8 percent of the population, but account for 16 percent of high-tech entrepreneurs and 25 percent of CEOs or lead engineers of high-tech businesses. These startups are the driving force behind economic expansion.
Romney's jobs plan also addresses free-trade agreements, labor relations and federal spending, all of which will help to ease uncertainty in the economy by expanding markets, ensuring balanced labor rules and reducing the federal deficit. After spending 25 years successfully working with businesses and engaging consumers, Romney understands that to help the economy grow and create jobs, the federal government must foster a positive, not punitive, environment for businesses and consumers. And that's exactly what his 59-point plan aims to accomplish.
The most pressing social issue today is the economy