Twelve Steps to Economic Recovery

[Stephanie]

Sounds good to me

SNIP:
How a Republican Congress could get America working again.
By Emil W. Henry

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Since the turn of the century, the most accurate predictor of elections has been the electronic prediction markets. On the eve of the election, most of these exchanges suggest with overwhelming odds that the 114th Congress will be controlled by Republicans.
If that’s true, the key challenges for Republican leadership will be how best to take advantage of this opportunity while preventing damage to their brand in the process. It is a mighty challenge with high stakes, because the actions of the 114th Congress and the debate it will unleash will undoubtedly become an important lens through which voters will view the political parties in the 2016 presidential election.

For House and Senate Republicans, I suggest a twelve-step plan, targeting economic recovery, to begin in January 2015. The plan contemplates both houses of Congress passing legislation and presenting it for signature to a president who has previously been shielded by Harry Reid’s Senate from substantive debate.

The plan is not intended to be a wish list of Republican priorities, such as the repeal and replacement of Obamacare, the enactment of comprehensive tax and entitlement reform (as embodied in the Ryan budget or Simpson-Bowles), or firm action on immigration. Too complex for speedy action and susceptible to demagoguery, these things can happen only if the Republicans gain the presidency in 2016 and hold the Congress.

Rather, the plan is simpler and intended to be unquestionable in its ability to spur job creation and growth. Each act can be summarized on a single piece of paper. Targeted to areas where Republicans can quickly agree, each holds the potential for at least a few breakout Democrat votes as well. Some of the policies embedded in the plan — if not brought to a vote in separate acts — could be incorporated through the budget process.

Our current president, reluctant to hand Republicans any kind of legislative victory, may veto many, if not all, of the proposed acts. But the value for Republicans will be in driving the debate and being the guardian of the initiative, and in the plan’s potential to offer a glimpse of the possibilities under a future Republican president. A few might even get this president’s agreement.

Here they are:
1. The War on Terror Resolution, declaring war on the Islamic State, crystallizing our national will, and ending all uncertainty, both domestically and with our allies, regarding the intentions of the United States. And in saying what the president will not say, the Republicans of the 114th Congress will reinforce their seriousness, authenticity, and willingness to be accountable — a stark contrast to the Congresses of recent memory.
2. The Invest in America Act, lowering the corporate tax rate to 20 percent and inviting the world to do business in America. Notwithstanding Hillary Clinton’s recent exhortation “Don’t let anybody tell you that it’s corporations and businesses that create jobs,” the fact is that they do. Globalization in the 21st century means we must compete for the world’s business, and at 35 percent we are under-competitive.
3. The Reinvest in America Act, eliminating tax on the repatriation of overseas profits, which would unleash the potential for $1 to $2 trillion of investment capital to come home. While some might erroneously believe that the return of such previously taxed capital would end up in the pockets of a few black-hatted Monopoly men, it doesn’t work that way. After-tax profits are, by definition, measured after payment of compensation, and are typically deployed in capital expenditure, investment, or R&D, all of which produce jobs and growth.
4. The Stop the Downsizing Act, eliminating the employer mandate in Obamacare and its effective tax on labor. Even Nancy Pelosi has figured out that “what’s in the bill” includes this counterproductive incentive to downsize and replace permanent labor with temporary employment.

ALL of it here:
Twelve Steps to Economic Recovery National Review Online

 

[waltky]

Seven-year malaise...

Is the US economic recovery stuck in a rut?
Wed, 06 Jul 2016 - The US economic recovery is now seven years old. So why don't many Americans feel like they've recovered?

On paper, all the indicators are there. The current economic expansion, which began after the global financial crisis of 2008, is among the longest in modern US history. Statistics show the jobs market is improving and the unemployment rate has fallen. Some 14 million new jobs have been created in the private sector since 2010. Manufacturing alone has added 900,000 jobs. And car sales hit a record high in 2015. Janet Yellen has said "the economy has made further progress" yet despite her reassuring words, all the supposedly encouraging data, the question vexing economists is why the country isn't in better shape.

You don't have to look far to see signs of the economy's fragility. Take the housing market. Eleven million Americans spent half their income on rent in 2014 - a record high, according to the annual State of the Nation's Housing Report from the Joint Center for Housing Studies of Harvard University. The general rule of thumb is that you shouldn't spend more than 30% of your income but with rents rising faster than wages that's impossible for many. Or what about the gross domestic product (GDP), which takes into account everything we spend our money on? The US's GDP grew just 1.1% from January to March.

Even the improving unemployment rate doesn't tell the whole picture. The country's labour participation rate - the share of the workforce in employment or looking for a job - is woefully low. Currently it stands below 63%, the lowest level since the 1970s. The bottom line is that the recovery is more fragile than anyone would like. Ms Yellen has indicated that the Fed will increase interest rates slowly. "There are structural problems in the economy and the decline in labour force participation that worries me, as well as a feeling that Washington doesn't work," said Glenn Hubbard, who was Chairman of the Council of Economic Advisers under President George W Bush and is now the dean of Columbia University business school.

Mr Hubbard isn't surprised by the malaise many are expressing but argues that the root cause extends beyond the financial crisis. "The economy as a whole is much better off from trade agreements and from immigration," he says, "but there are individuals in particular who may not be. And we as an economy haven't pursued policies particularly related to supporting work to help those individuals. "I think that's the pain we're seeing." Income inequality between countries has gone down as a result of globalisation, but it has gone up within countries. So while workers in some parts of the world now have more opportunities, Americans have lost jobs or seen their earning power decrease.

In fact, working families haven't seen a raise in decades. Many are living pay cheque to pay cheque. According to a recent survey by the Federal Reserve, nearly half of all American adults couldn't scrape together $400 to cover a financial emergency such as a health problem or a car that needed fixing. Part of the problem is the "winner takes all" economy. Those at the top are doing better. Those in the middle and bottom face stagnant wages or worse.

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