December 2 2011

Unemployment Decreases: Time to "Step on the Gas"

Hadley Heath

The November jobs report is out, and it's good news.  

Unemployment has dipped to 8.6 percent - the lowest rate since March 2009.

But that's not great news.  About a third of the (meager) private sector job growth we've seen in the past month is a direct result of retailers adding seasonal workers to deal with Black Friday and the uptick in consumer spending that happens this time of year.  Consumers are spending money in spite of reduced wages (Sally's GOT to get that Tickle-Me-Elmo!), and we know this won't last.

Also, about 350,000 people gave up on their job searches.  That's sad, but it's counted as "happy" news because the official unemployment rate decreases when this happens. 

But hey, let's try to look at the bright side.  As President Obama always says, it could've been so much worse!

What was his reaction to today's job numbers?  The President said, "Now is not the time to slam the brakes on the recovery, right now it's time to step on the gas."  

I agree.  It's time (it's past time) to step on the gas.  So how do we do that?

Here are 4 high-octane suggestions:

1. Repeal ObamaCare.  Betcha didn't expect that one! The Affordable Care Act is burdensome to small business, will result in higher health costs, and will even give employers an incentive to "dump" their sick workers into statewide exchanges.  This is an obvious first suggestion to jumpstart hiring. 

2. Scale back the federal regulatory state that costs us $1.75 trillion annually.  Congress should act to limit bureaucratic agencies from writing new rules that cost businesses in time-costs (as businesses have to take time to understand that they are compliant), and expenses (to pay consultants to interpret regulation compliance for them).  And regulations cost consumers as they limit the market force of competition that drives prices down.  Congress could pass legislation like the REINS Act or the Regulatory Accountability Act (as the House did today) to review and limit burdensome regulations.

3.  Tax reform (another gimme).  Everyone in Congress seems to understand that tax reform is necessary; they just disagree about how it should be done.  We should literally take the tax code we have today and throw it out the window (or burn it).  Let's start over and simplify it without raising rates on job creators, let's lower the corporate tax rate to keep American jobs on American soil, and while we're at it, let's kill the estate tax, which is responsible for the death of 1.5 million jobs annually.  The hot topic today is the payroll tax extension, which is a good idea, but should be paid for with spending cuts, not tax increases (see #4).

4. Get the fiscal house in order.  The uncertainty caused by our nation's behemothic debt stands in the way of job creation.  Reducing deficits and paying off the debt is like tax reform: Both Democrats and Republicans agree it should happen, but they disagree about how (and they disagree about who's to blame).  Well, Keynes is dead, and we know we can't spend our way to prosperity.  We need to reduce our debt-to-GDP ratio, and we should do it through cutting spending.  Here's one suggested way to do that.  Regardless of the specifics of the plan, Congress should look to serious entitlement reform, because entitlements are the biggest drivers of our debt.

Of course, this list is just for getting started.  Any long-term national employment-boosting strategy would also include free-market health care reform to replace ObamaCare, state-based education reform to better prepare the next generation, and immigration reform to ensure a simple, real path to citizenship for workers who want to contribute to America's success.  

I agree with President Obama.  It's time to step on the gas in job creation.  Unfortunately, his economic philosophy indicates he's still in reverse gear.  

Let's get in free-market gear, and then step on it.

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