A senior Obama administration official said recently that the private sector will have to lead this economic recovery. He’s right! But the private sector cannot do it unless government gets out of the way. The Obama administration’s policies have increased the size of the federal government, increased regulatory barriers and dramatically increased the national debt.
Most Americans sitting around the kitchen table knew that we could not spend and regulate our way to prosperity. But the president and the Democrat-controlled Congress did it anyway. And now, after nearly $1 trillion in government spending, the economy is still stalled. Namely, 1.8 percent growth in gross domestic product in the first quarter of 2011 is anemic, and a 9.1 percent unemployment rate continues to be disappointing to the nearly 15 million people who are still unemployed.
Our national GDP could easily be growing at 5 percent or more, with the top tax rates for businesses and individuals set at 25 percent and made permanent until we replace the entire tax code mess. And taking the capital gains tax rate to zero is just the fuel that the small business part of our economic engine needs.
It sure would be nice to hear an unemployment rate report of under 5 percent again, which would mean at least 7.5 million people could be back to work. It would be more than just music to their ears. They might even have some real hope again.
“Hope and change” became “spend and regulate” in the Obama administration. And now, the president and the Democrats want us to “watch and hope.” Simply extending the tax rates for two years with a 2 percent one-year payroll tax holiday for employees is not going to tickle this economy back to prosperity.
With all due respect, Mr. President, there is no hope that this economy will turn itself around. It will remain stalled because there are no meaningful tax cuts, there is no regulatory relief and there is still the uncertainty about what tax rates will be in 2013.
The rollout of Obamacare is adding to the uncertainty. Thousands of companies and several states have asked for waivers from trying to comply with Obamacare, due to its adverse effect on their current health care costs. At the same time, many of the bureaucratic rules are still being written.
There’s a better way to increase access to health care and reduce costs, using patient-centered and market-driven principles. Obamacare is the exact opposite. It must be repealed and replaced, but that will not happen with this administration.
When the National Labor Relations Board tried to intimidate Boeing Corporation into not expanding a production facility in South Carolina because it is a right-to-work state, some businesses simply put expansion plans on hold. They are not going to be bullied into expanding their businesses into union-dominated states.
The private sector is the engine of this economy, but putting more spending and regulations in the caboose of the train is not going to fuel the engine. So expecting this economy to grow faster by watching and hoping is an empty expectation.
Much of the public has been deceived into thinking that cutting tax rates reduces revenue into the Treasury, and that it only helps the rich. The experience of the 1960s and 1980s, when Kennedy and Reagan were in the White House, respectively, debunks that notion.
Watching this economy struggle over the next 18 months is going to be especially painful for the unemployed and those businesses that are barely holding on for survival. And yes, the private sector will have to take the lead when we properly boost the engine.
Until then, we might as well watch grass grow, because that’s about all the green this economy is going to see.
Herman Cain, the former CEO of Godfather’s Pizza, is a Republican candidate for president.
