Jobs for America

A recovery without people working is not a recovery for Main Street. This country needs to focus on the kind of recovery that creates a long-term, stable recovery that is not dependent on government programs. What we need are Jobs for America.

To create jobs in America we must first understand where jobs are created in our economy. The fact is that small businesses in our country create about 75% of all new jobs in America.

So if we know where jobs come from, what can we do in this economic climate to create them?

The answer is very straight-forward: make it easier and less expensive for small business to do business. If we reduce the risk that entrepreneurs take when they start a business by removing barriers to profit, we can create more jobs. Unfortunately, this is the exact opposite of the action being taken by our current congress. Health Care Reform, Cap and Trade and excessive government spending all conspire to discourage small business growth and job creation. It also does no good to propose providing money from the Troubled Asset Relief Program to loan to business. First of all the TARP funds are not in a “lock box”. They are additional debt the government will have to incur. Secondly, an environment where businesses want to borrow from that source or any other source must be created.

The proposed Health Care reform and the Cap and Trade legislation will make it more expensive for businesses to operate and to hire employees. Contrary to the claims that these bills are budget neutral, costs are going to go up as a result of these acts. It is impossible to insure 31 million more people and not pay more to do so.

Excess government spending makes capital more expensive and leads to inflation in the long run. We are going to see higher inflation and higher capital costs in the future – there is simply no way to avoid it given the current actions of our government.

All of this will require higher income taxes, including stealth taxes and fees which of course make it more expensive to operate a business and create jobs.

Given this simple economic lesson, another important economic fact is that the purpose of a business is to generate a profit for its owners. All of the actions discussed above increase the cost of operating a business and thus the cost of creating a profit. Therefore, in order for a business to be profitable it must 1) increase prices for its goods or services, 2) decrease costs or 3) go out of business. Option 2 usually results in the loss of jobs and option 3 guarantees the loss of jobs.

Businesses do not pay the taxes or the increased cost forced on them by government. Their customers pay them through increased price or reduced service, their employees pay through decreased benefits, decreased pay or lost jobs, or the business closes down and all jobs are lost.

How do we then remedy this? The answer while complex is also very straight-forward: reduce taxes and governmental intrusion and the added costs government imposes on businesses.

A smaller tax on a broader base (more businesses and more jobs) is much more effective than a higher tax on a narrower base (fewer businesses and fewer jobs). The tax code is the most effective tool for government to get the results it desires. We need to structure tax legislation to encourage desired results not to punish and discourage those who are successful and create jobs, and most definitely not to redistribute wealth.

The confiscation of income and assets by government through taxation is the greatest detriment to the creation of wealth and job creation in America. Jobs can only be created if wealth is created.

The economic decline of the past two years is still fresh in the public mind not the least because many are still suffering. There is a great outcry for reform and government regulation. However, this devastating economic decline was largely the result of government regulation and mandates imposed on the banking industry.

Oversight is needed. But government does not need to tell banks who they will lend to and under what terms. Government’s role is to provide protection to consumers and markets from excess not to mandate how the private sector will operate. History has proven that private industry is much more efficient and better at creating wealth and jobs than government. Our government needs to let private industry do what it does best, create wealth and jobs. Through economic growth not government confiscation wealth is spread.

I applauded President Obama’s Afghanistan troop decision

The big questions in the Afghan war are:

1. Is this a war we should/need to fight?
2. If we should/need to fight shouldn’t our goal be to win as quickly and decisively as possible?

Mr. Obama appears to believe that we do need to fight this war. Answer to question 1:
YES.

Mr. Obama’s answer to question 2: By committing at lease 30,000 more troops Mr. Obama is backing up his decision with action. His speech in Oslo also demonstrates that he is willing to stand fast on the security of the United States and our allies.

However, shouldn’t we err on the side of overkill if we are going to err in the conduct of this war? A minimalist approach is not the appropriate approach when you are spending the taxpayer’s treasure and the lives of young Americans. It appears that we are yielding to the more liberal element of congress in this surge. This wing of congress is complaining about the cost of sending troops to shore up our defense and to, hopefully, further limit the loss of our troops and speed up their return home. This is the same group that has no problem increasing the government debt cap to trillions of dollars, most of which will be wasted if the stimulus package is to be an example.

We must fight this war for a multitude of reasons not the least of which is that we have become perceived as a country that is weak and does not follow up on our commitments. Additionally, there is a clear threat to our national security posed by allowing terrorists to have bases established in Afghanistan. Walking away is an unacceptable choice.

What most on the left do not appear to understand is that we do not get to define what strength on our part is: our enemies get to define what is perceived as strength on the part of the United States.

If we must fight, let’s fight. Commit the troops and resources necessary to win in six months not eighteen. Be decisive, finish the job and bring our troops home.

We must also have a plan for after the fighting is over. This has been missing from the beginning; otherwise, we would not still be there. We won this fight once, now we have to win it again. The idea of announcing we will start a troop draw down at a set date is a mistake. That is like telling bank robbers that you are going to leave the vault open and unguarded at a particular day and a specific time. What do you think would happen then?

The administration would take some heat from most in the Democratic Party for taking this strong stand. Mr. Obama will, however, earn his Peace Prize and reap much more in accolades for the victory and in establishing a stable friend in Afghanistan.

This is still the greatest country and the greatest military power on earth. Why do our representatives in congress appear so determined to lower each to the level of the rest of the world?

The health insurance reform we need

What our health care system needs is repair not a complete overhaul. We need to make the free market and competition a central part of reform. We do not need more government intervention and control. After all when has the government ever run anything as well as private industry? Can you name one instance? I did not think so.

We need to take a 4 step approach to reform

1. Tort reform. It is estimated that huge awards from legal suits and malpractice insurance add $700 billion to $1 trillion annually to the overall cost of medical care. This represents the entire cost of the proposed overhaul bills! Doctors are forced to practice defensive medicine to stay out of the court room. After all it is much easier to second guess decisions made in a time of crisis than it is to make them, and that is what is going on far too frequently. There should be penalties for negligent actions but those costs and the determination of negligence should be decided by a panel of medical professionals not the average lay person.
2. Increased competition among insurance companies. Why does Polsi/Reed, and apparently our current representative, fear true competition? A government run insurance company will not be competition for private sector companies. A government insurance company will result in a monopoly in time. Insurance companies should be allowed to compete across state lines. We do not need different policies for each state as now exists. There should be standardization of the policies offered on a national basis. By increasing the competition between the companies and reducing tort costs prices will come down.
3. If we must overhaul the entire system the only reasonable and fair way to pay for it is to tax insurance benefits. It is time that we recognize that health insurance benefits are income when provided either partially or in whole by the employer. People who work for large organizations and the government receive a huge amount of tax free income that the rest of the country does not. We should tax the benefit and make it 100% deductible for everyone in the country. This would put every taxpayer in the country on the same footing and allow everyone to participate in the cost of healthcare. Likewise everyone should be required to have insurance. By forcing the healthy to have insurance the risk is spread even further and costs are decreased. The only function government should have in health care is to levy a cost on those who do not voluntarily participate, either through a tax penalty or through reductions in subsidies received. These funds would be turned over to the insurance companies who participate in the pool discussed below. Also anyone who managed to slip through the cracks would have any tax refunds due them confiscated in an amount sufficient to cover their costs just as we currently do for student loans. This would apply to non US citizens as well. Non US citizens who utilize the health care system without owning insurance would be subject to having their assets seized and deportation.
4. There should be a nationwide pool, shared equally by all insurance companies, that insures the now chronically uninsured and those who do not voluntarily participate by purchasing insurance (funding is discussed above). Because this pool would be made up of healthy young people who chose not to purchase insurance as well as the currently uninsurable and because the pool is spread among all insurance companies the cost could be minimized.

This is not a complicated approach to reforming our healthcare system. The problem is that our politicos do not have the guts to put something like this in place. It would mean that everyone in the country would pay for coverage in one way or another. A minority of taxpayers who produce would no longer be supporting the majority (almost 50% of the people in this country do not pay any federal income tax). It would provide a way to reduce the unwise deficits now being run up and make it fair for everyone. Income taxes would not have to be increased across the board (you increase revenue in two ways; increase the tax rate, which usually reduces revenue, or increase the tax base (tax the insurance premiums paid by the employer). This would be a cost neutral measure for the government, and would actually increase revenues.