THE PRESIDENT SPEAKS: And fails to address the economic crisis. By Jim Gilmore, President & CEO, Free Congress Foundation @freecongress @gov_gilmore
"On Wednesday, July 24, 2013, the President spoke at Knox College in Illinois, asserting that he wanted to offer solutions to the continuing economic crisis facing our nation. The morning of the speech, Valerie Jarrett, the President’s top advisor said his speech would set out a long term strategy based on the middle class and not top-down recovery. After careful review, it is clear that this speech offered no path forward or any strategy for recovery.
The President said in his speech “I will welcome ideas from anyone from across the political spectrum”. OK Mr. President, we have a suggestion: We here at the Free Congress Foundation have focused on economic recovery for the United States for over three years. At the end of 2011 we offered the “Growth Code”, a specific program of tax reform that if enacted would spur growth, get the economy moving, and create jobs that would get us out of this recession.
The truth is that this country has not yet recovered from the “Great Recession”. Historically, this country grows at 3.2 %. We are not growing anything like that rate. All estimates show growth in the near future at less than 2%. No estimates show recovery at 3.2% or the higher rate it will take to make up the ground we have lost in recent years. Unemployment is historically 5.7% (or better) in the U.S. We have been over 7.5% unemployment FOR FOUR YEARS NOW.
The consequences of this situation are not simple economic numbers. It means lower wages as more workers chase fewer jobs. It means gross unemployment in the black community. It means no jobs for our bright young people coming out of school and getting started. It means that long time workers are being laid off, and not being able to get reemployed. It means family strife. It means an endangered national security. This is a historic crime against the citizens of our country, and no government benefit program will make up for lost opportunity.
The only answer, as we have said for years, is to focus on growing our economy. A growing economy has more business opening and existing businesses expanding, creating more jobs. More jobs means a better life for our citizens. It also increases tax revenue organically, making high taxes unnecessary and eliminating deficit spending. We should control government spending, but it gets a lot easier when you have more tax money coming in.
There is an imperative for a bold, decisive program to grow our economy. That program is missing from the President’s speech. The President instead calls for more government spending. He wants job training, manufacturing incentives, and paying to make education cheaper. None of this fosters investment by the private sector. The speech is full of partisan attacks, blaming and scapegoating, but such political maneuvering is only a diversion to distract from the lack of success in the President's own record. President Obama’s economic legacy so far has been to raise the payroll tax, reducing the take home pay and spending capacity of every working family. He has imposed discriminatory taxes on the rich, making sure they will be discouraged from investing in our economy. He has imposed a health care nationalization that imposes new taxes and penalties on the business owners who are truly responsible for growth, limiting their ability to hire new workers and stimulate the economy.
What we should take away from the President’s speech is what he does not mention: There is no bold program that will incentivize investment, job creation, and growth. The country desperately needs a growth plan to save the livelihoods of the people of the United States, but the President does not want growth to be a focus of the economic debate. It may be that the philosophy of this President makes it impossible for him to see the path forward that will bring us out of recession. We can only ask how many lives must be ruined, how much loss must be endured by the people of this country before a positive program comes forward? The emergency is now. The need for action is now. We look forward to the day when we can complement the President on a new program to renew our economy and our country."
The Free Congress Foundation
We invite all of our friends to read "The Growth Code" proposal in full at www.freecongress.org
THE GROWTH CODE
Made up of five steps, The Growth Code is simply, squarely and precisely focused on the taxcode and restoring America to a sustainable economic growth trajectory:
* A simple unified 15% rate on all business income, regardless of the type of entity;
* Tax rates of 10%, 15% and 25% on individual income is currently defined under the IRC;
* Immediate expensing of capital equipment;
* Elimination of the abhorrent practice of double taxation;
* Any household living in poverty will receive a family tax credit of $4,300.
Full Report of the Growth Code