For years we have been commenting on what we believed to be the necessary ingredients for a healthy and growing economy. More recently, given the subpar growth we have witnessed in the US economy, we have suggested that while the economy "gets by in spite", excessive government intrusion in the affairs of businesses and individual citizens alike, is the primary culprit holding back what would otherwise be a very strong economy. Incredible technological advancements achieved in communications, healthcare, energy production, etc., have been so pervasive that we should be experiencing unprecedented growth - but we're not!
A simple review of previous posts like this one, or this one, or this one, will give you insight into our thinking on what ails the economy in this era. We certainly offered our solutions, in those posts and others, to what has been over a decade of mismanagement. But none so eloquent and simple as those proposed recently by former US Secretary of the Treasury, Labor and State George P. Schultz. In his Wall Street Journal op ed "How To Get America Moving Again", Mr. Schultz offers his sage advice on what it would take to get our economy on track, and quickly.
He makes these points in his plan to revitalize America:
"Cleanse the personal income tax system of deductions and lower the marginal rates..."
"And let's lower the corporate tax rate to be competitive with the rest of the world."
As per the current regulatory maze: "Overhaul the current complexity so that even small business can see how to comply without having to hire compliance advocates that they can't afford."
"...why not take the mystery out of the Fed? The Fed can establish a rules-based monetary policy..."
"Get control of spending.... One way is to change from wage-indexing to price-indexing as a method of calculating benefits, and apply the change only to people under the age of 55."
On healthcare: "The main risks in the health care area are catastrophic events that have high costs, so high-deductible catastrophic insurance is what is needed." He continues by advocating the expansion of Health Savings Accounts, more emphasis on both public and private neighborhood health clinics.
On the military: "Let's put our military to work figuring out what they really need. We want no-nonsense people in charge. We want to do away with all nonsensical across-the-board sequester rules. But we must have a robust military capability. And then we need to conduct ourselves in a credible way."
It would be wise to adhere to this principled, common sense approach. Is anyone in Washington D.C. listening? HT to Scott Grannis.
Common Sense From George P. Schultz
