Short term stimulus and Greek tragedies
Thursday, November 10, 2011 at 01:45PM I hear over and over from talking heads that calls for ending economy-killing regulations and tax reform are long term solutions, but what we need is short term government stimulus to create jobs and pump up demand. Democrats mostly say lack of demand is the problem. Even moderate Republicans are on the demand side.
We're in a situation, though, in which long term and short term are bound together. Businesses are not investing in America because of the long term outlook. Businesses won't expand and hire if they think the long term outlook is uncertain or bleak. When the EU is on the brink of implosion, and when China appears to be in a bubble of sustainable growth, there are at least two ways businesses in America can analyze the global and domestic markets. If American businesses are confident that our government is not going to continue the regulation blitz, that Obamacare is not going to hit them with unintended consequences and that taxes will not necessarily go higher because of our mounting debt, they will expand and hire to take advantage of weaknesses in other nations and thus attract investment. But, if businesses are worried that exports to Europe will shrink, and that China might withdraw in nationalist protection mode if they experience economic problems, and if businesses expect more expenses piled on by government interventions, then they will seek safe havens for their capital.
A positive long term outlook is critical to business confidence, so it would behoove our politicians to develope plans to instill confidence in American enterprise. Obama and company are doing the opposite by framing "unfettered" capitalism as the enemy and government interventions as the solutions. This Democrat populist ploy is only adding to the worries of American businesses. Yes, there are large corporations in America who will always profit as long as they enjoy government protection and favortism, but our future lies in the businesses which aren't protected, which need assurance that their costs won't rise significantly in the long term, say the next 5 to 10 years. Instead of trashing American enterprise, our country should be championing enterprise, expansion and job growth led by successful producers.
We have an opportunity to make America a magnet for business investment, but we have to create a very business-friendly environment, and right now it's not too friendly. Rather than follow Greece to ruin, we should learn from what has crought Greece to ruin, then make sure that the business of America is business -- free, open trade, innovation, creativity and optimism -- we can do much better, but not if our government is blocking growth.
M. Farmer | Comments Off |
China,
EU,
Greece,
economic growth,
global economy,
jobs,
regulations,
stimulus,
tax reform 
