Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Congress Fools Around and Does Nothing to Create Jobs. Here Is What It Should Do.
Republican leaders talk as though the most important thing for us to do is to reduce expenditures and bring the budget into better balance. It is true that the current budget deficit is unsustainable. Democrats have spent over $800 billion on a foolish Recovery plan that at most kept a million government employees in their largely unproductive jobs and may have cost up to millions of jobs in the private sector. Getting control of the federal budget is indeed important but getting the vast army of unemployed back to work is much more important. And it could be done quickly. What we should be doing is:
1. Bring trade into better balance. An annual trade imbalance of $600 billion dollars means that we lost 6,000,000 jobs to other nations. Before the recession, the trade imbalance was $800 billion. Trade, both exports and imports, declined as a result of the recession but it is growing again which means we are losing more jobs. We can do something immediately that would bring trade into better balance. That something single country flexible tariffs, what we have termed scaled tariffs. Imposing the single country scaled tariffs would create a million jobs within a year and millions more as the U.S. once again becomes a place to invest in new factories. The scale tariffs would bring in a trillion dollars the first year and as trade is balanced (a trillion dollars over the period that trade is balanced), the ensuing economic growth would bring in billions in revenues.
2. End the prohibition of drilling for oil and gas on public lands and offshore in the Atlantic, Pacific, and the Arctic. Brazil, Russia, Norway and others have found huge unexploited reserves of oil offshore and are going full speed ahead. We have allowed our environmental extremists to veto new sources of traditional energy. Pres. Obama still has not restored deep water drilling in the Gulf of Mexico and oil drilling rigs have left for friendlier waters. Yet he is willing to guarantee loans to Brazil for deep water drilling in the Atlantic. What hypocrisy! And just to appease an irrational group to get re-elected. A million jobs within a year.
3. Go full speed ahead on developing drilling for natural gas in our abundant shale deposits. It is estimated that we have sufficient reserves of natural gas to satisfy our energy needs for a century or more. Heavy vehicles like trucks and buses as Boone Pickens has urged could be converted readily and we would need thousands of filling stations. A million jobs within a year.
4. Postpone for fifty to 100 years the construction of wind and solar energy plants which cost jobs and don’t create jobs. These are so uneconomical that none would be built without huge government subsidies and rising electricity prices which cost jobs. We have enough fossil fuels and uranium to fuel low-cost electric generating fossil fuel and efficient nuclear plants. France which gets 70 percent or more of its electricity from nuclear plants has the lowest electricity costs of any major industrial nation. Spain and the Netherlands have cut back on their financial incentive to build inefficient wind and solar and we should end all financial incentives to wind and solar electric generating plants.
5. Get the misnamed Environmental Protection Agency under control and end the foolish environmental restrictions imposed in the name of man-made global warming. We have had periods of global warming equal to the one in the last century many times over the last 10,000 years, long before there were any industrial and transportation uses of fossil fuels.
6. We have too many unproductive regulations of business. In an op-ed column in the Pittsburgh Trib-Review on 5-1-2011 by Wayne Crews and Ryan Young of the Competitive Enterprise Institute , they reported that complying with federal regulations imposes a burden of $1.75 trillion a year and none of the cost of compliance appears in the budget of the federal government. While some regulations are needed for good performance of a market economy, many regulations do more harm than good. There were 224 sets of regulations that imposed costs of compliance of $100 million or more. Congress does not vote on most regulations, it has given government agencies like EPA authority to impose regulations. The mandate on banks to lend to home-owners in poor neighborhoods was used by ACORN and other leftist groups to blackmail the banks and it could be argued that it led to the banks making home loans without adequate home-owner equity and contributed to the real estate boom and bust that was and is the major cause of the current recession. Banks still own trillions of dollars of mortgages that are in default. Getting rid of unnecessary restrictions on business activity would stimulate business and create perhaps a million jobs.
7. Get rid of the prohibition on the production and use of drugs which is costing us $40 billion or more per year, has filled up our prisons with mostly small black dealers, has cost the deaths of thousands abroad, and, as we have written, cost us the war in Afghanistan. When our troops got involved in destroying the poppies, Afghanistan’s leading agricultural crop, in the fields, we turned from liberators to oppressors. Taxing narcotics and marijuana would gain us billions in revenue and end the violence associated with drug trafficking all over the world. It would create millions of legitimate jobs and empty our prisons.
8. Get rid of the corporate income tax and integrate it with the personal income tax. Corporations that produce for the domestic market pass it on as they would a sales tax while corporations that export goods are made uncompetitive. It would stimulate exports and create millions of jobs.
These aren’t all we can do to restore our economy but they are a quick start. In the process we will be doing much to reduce the deficit. There is nothing like economic growth to bring in revenues. More important these change would return the U.S. economy to full employment rapidly.
Comment by rickinduluth, 5/2/2011:
You forgot something.
#9. Outlaw all labor unions. Repeal all labor laws,(the right to organize,overtime rules,workplace safety,child labor,hours of service rules,etc.). Of course the "free" market will take care of all these things and more.
Response to this comment by sara, 7/22/2012:
Real Estate Taxation
Journal of Economic Literature:
Atlantic Economic Journal: