Jim Gilmore is a former Virginia Governor, and President of the Free Congress Foundation.
“This morning, the Bureau of Economic Analysis released a report that showed that Gross Domestic Product (GDP) of the U.S. shrank by .01% at the end of 2012. After the third quarter’s growth rate of 3.1%, now they are revising the annual U.S. Growth rate projections downward. Our annual growth rate last year is now estimated by some to be 2.2%.
I remind those who are following the Growth Code strategy of the Free Congress Foundation that historic growth in the U.S. averages 3.2%. A robust, growing economy is the goal of the Free Congress Foundation, and that will require growth ABOVE 3.2%. The country desperately needs new policies to make up lost ground and promote growth. Every day that the U.S. grows at less than 3.2% American citizens are out of work and struggling to make ends meet.
Many on Squawk Box on CNBC this morning continue to put on a “happy face”, settling for gradual improvement from the catastrophic recession. A low bar indeed! This complaisance discourages policy makers in this country from taking the action necessary to grow the economy. We at the Free Congress Foundation are not just talking through our hat. We have done the hard work necessary to propose a new strategy for growth. It is called The Growth Code, and can be read in full on our web page www.FreeCongress.org.
Not everybody on Squawk Box this morning was so optimistic. Martin Feldstein, former economic advisor to President Reagan said we would be lucky to get to 2% real GDP growth in 2013. He also expressed concern about the Federal Reserve policy of holding down interest rates to artificially stimulate the economy. He said “Inflation pressures could build up when the economy is still looking at high levels of unemployment.” In other words Feldstein warns against “stagflation.” How long are we going to burn taxpayers’ money trying to “stimulate” the economy before we recognize that we need a new plan to create real organic growth in this country?
We at the Free Congress Foundation are concerned about the American citizens who will wake up this morning with no job or no hope for advancement in their current position. Our citizens will never get those days back. Those who do have jobs now pay 2% more in social security taxes due to the “Fiscal Cliff” deal. This means 2% less in the paycheck of every working American. As Martin Feldstein pointed out today, the payroll tax hike will make it increasingly unlikely that working Americans will lead us out of the recession by buying more.
Those Americans whom we need to encourage to invest in American jobs are now instead paying more in higher taxes. The “Cliff” deal was the opposite of what we need to be doing to grow the economy. We must stop the bickering in Congress and get about the business on growing the U.S. economy. It must become our new national mission.
If you are concerned about the direction of both Congressional and Presidential policy that downplays the consequences of today’s stagnant growth, let me know what worries you by leaving a comment on our Free Congress Foundation Facebook or Twitter pages. I look forward to working with you to bring the country back to our historic economic strength.”