Super Committee Target #2: Want Jobs? Go for Growth

And I do not mean growth in the Federal spending.

But Bloomberg reports that President Obama’s address to Congress will call for about $300 billion in additional spending for extending the payroll tax cuts, aid to local government to reduce layoffs of teachers and first responders, and some more of those shovel ready infrastructure projects. The President’s plan will pay for this $300 billion in short term stimulus with “revenue increases” long term.  Translation: higher taxes. The White House signaled that the President will make longer term recommendations to the super committee next week probably in another speech.

The problem the President faces is the $300 billion supplemental stimulus proposed is mostly a continuation of current policies and thus is unlikely to create many jobs, encourage much growth or raise confidence enough to unleash hoarded cash. With the combination of the high unemployment, the horrible zero net jobs report for August, and the political sparing, we are losing sight of the real problem and instead are focused on symptoms and gimmicks.  The result is we risk a long stay at in the ditch before the tow truck arrives to pull us out.

The President must give one ‘hellava’ speech September 8th to persuade a skeptical public he ‘gets it’. But his words will be compared with substantive proposals by other candidates.  Jon Huntsman released his last week.  This week Mitt Romney laid out a 59-point plan to get growing again.  The President is late to the jobs plan party so his plan must measure up to some of the good ideas of his competitors’.

So here is my check list to compare President Obama’s speech with Jon and Mitt’s plan.   √=me too.

Proposal

Jon Huntsman

Mitt Romney

President Obama

 

 

Tax Reform

Revenue-neutral personal income tax simplification with 8%, 14%, 23% rates.No deductions/creditsNo Alt Min Tax

No Cap Gains Tax

Cut Corp Tax from 35% to 25%

No Tax on Cap Gain, Div., Interest < $200k income

No Estate Tax

Extend:payroll tax holiday
unemployment ins.both expiring Dec. 31.

Reform?

 

Regulatory Reform

Repeal ObamaCareRepeal Dodd-FrankRein-in EPA

Curb NLRB labor regs

Reform FDA permits

Patent Reform

Privatize Fan & Fred

 

Postpone ozone and other EPA rules to 2013

?

 

Energy Independence

Grow USOil & Gas Production.End energy subsidies

?

 

Free Trade

OK trade deals: South Korea, Panama, ColumbiaNew Free trade deals: India, Taiwan, Japan

China trade sanctions as currency manipulator

Will send trade deals to Congress when they agree with labor conditions

 

Spending Reduction

5% spend cut =$20 BlnCap spend @20% of GDPRestructure Fed Gov’t Balc’d Budget Amend.

?

 

 

Workers & Immigration

Retrain workersRetain H1b foreign skills

Green card with diploma

Immigration reform

Let unemployed retrain as unpaid interns and still draw unemployment.

 

Job creation is important, but the unemployment rate is a lagging indicator.  It is our report card on our performance addressing the real problems with our economy—lack of GDP growth and uncertainty.  Unemployment is still high because US GDP growth is weak and uncertainty is paralyzing us.  Fix those two things and unemployment rates will drop as business spends its hoarded cash to create jobs to produce products and services to satisfy growing demand.

There are many good ideas on these lists from the candidates for President Obama to applaud and adopt, but most of them will take time and bipartisan cooperation to achieve.  That’s the problem.  The next President is not going to be chosen for fourteen months, then add three more until January 20, 2013, then time to get the new administration officials confirmed and on the job.

The bottom line is we can’t wait that long for real action focused on getting growth going again. So the supercommittee has an opportunity to bring us together around a bold plan to jump start GDP growth, restore confidence, reduce uncertainty and create jobs.

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