Wanted: Good Policy for Small Business Growth
If your car drives off a boat ramp or a bridge into the water, you have eight or nine seconds to get your car windows open. If you delay by, let's say, trying to open the door or calling 911 on your cell phone, it will be too late. Your car will fill with water, you and your passengers will not be able to get out. There is no time for dithering or argument.
But in Washington, nothing bad happens to elected officials when they avoid taking on the tough issues--issues, in fact, that will drown the country if left unattended indefinitely. The foot-stamping and tantrums of the past several weeks might make an observer think there is nothing important to do in the U.S. capital. But in fact, the neglected business of governing gains urgency with every passing month. American competitiveness in the world market needs to improve to create jobs and secure the country's financial future.
If elected officials had their eye on the nation's long term prosperity, what would they be doing? Negotiating, not grand-standing. In a successful negotiation, everyone walks away a little happy and a little unhappy. No one gets the whole cookie. Here are key issues they need to reform--fast:
When the tax code encourages big multinationals to open a research facility or factory in a high-skill, low-tax country like Ireland or Singapore, the U.S. loses not just the engineering, management, technical, and factory line jobs, but the small business supply chain to service that operation, the small business outsourcing of maintenance and security, the small business benefits of spending by those employees, and the rents and taxes that accrue to the immediate locality. The U.S. now has the highest corporate tax rate in the world, when state taxes are included, pushing jobs overseas. The White House and Republicans agree that something must be done, but nothing has been.
A Republican party that was once pro-immigration because immigrants further economic prosperity has handed the baton to the Democrats. Everyone agrees some immigration is good and the current law is bad, but no new law has passed.
The drama in Washington over the budget and the debt ceiling conveniently distracts from the essential, arguably existential problem of the country's future obligations to social security, medicare, and government employee benefit recipients. The population bulge of retirees and the expense of the health care system make pay-as-you-go unsustainable. Programs must be scaled back or means-tested, taxes raised, health care rationed, economic growth dramatically boosted, or some combination of the above--or the U.S will sink under the weight of its promises to pay. The numbers are terrifying.
The selfish, embarrassing behavior of the Congressional extremists would not be countenanced in any pre-school classroom. If elected officials continue to serve only their own interests, rather than in the interests of this country, the economy, and generations to come, political reform may become the most important order of the day.
MARGO EPPRECHT | Columnist
Margo Epprecht is a chartered financial analyst and freelance business writer. A former stock analyst who covered retailing and health care, she regularly writes about the economy for Inc.com.