To grow the economy, we must shrink President Obama's big government
US unemployment remains high. Job creation is lackluster. GDP growth is sluggish. Each of these measure should be higher. Lawmakers must reverse the harm of Obama's big-government policies by stopping Taxmageddon, eliminating red tape, and reforming entitlement programs.
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First, stop Taxmageddon – the massive tax increases coming on Jan. 1, when the Bush-era tax cuts and other tax policies expire and new tax hikes from Obamacare kick in. Blocking scheduled tax hikes on work and capital will help heal business and investment uncertainty and get people back to work. That’s just as true for a middle-income senior with dividend-paying stocks as it is for a wealthy venture capitalist.Skip to next paragraph
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Next, stop and reverse the rising tide of unnecessary red tape. This includes ending the Environmental Protection Agency’s tireless crusade against global warming. It means repealing the new Consumer Financial Protection Bureau, an unaccountable entity with unlimited power over every form of consumer credit, and the “Volker rule” to restrict bank investment – both spawned by the “Dodd-Frank” Wall Street reform law of 2012. And, of course, Obamacare must be repealed.
These harmful government interventions into what should be private markets have created vast uncertainty for employers, investors, and families.
EPA regulations, for instance, are highly unlikely to affect global warming, but they will almost certainly cost consumers when they go to buy a car or turn on the lights. They will also likely drive business activity offshore. Dodd-Frank will do little to prevent “too big to fail” financial institutions. But already it’s making it harder to get a mortgage and more expensive to do business with your bank. And Obamacare will likely drive the nation deeper into debt while delivering substandard health care.
Congress and the president must get serious about putting the nation’s fiscal house in order. Our rapidly mounting debt reflects a spending problem. The answer is not higher taxes. Indeed, the threat of future tax hikes and burgeoning debt is helping hold back growth.
Finally, entitlement programs must be put on fiscally sound footing and strengthened for future generations. Social Security must be tackled, so it is affordable and – unlike today – protects seniors against living their retirement in poverty. We are living longer, so the retirement age should be gradually increased.
As for Medicare and Medicaid, rather than have government bureaucrats micromanage half of all health care in America, we should move to a model where the government helps pay for premiums of private insurance. That approach puts patients and doctors in charge of health-care decisions. Bringing these programs under control is vital to reining in spending, so that we can stabilize and ultimately reduce the national debt.
Excessive federal spending, regulation, and debt only exacerbate our economic woes. To grow the economy, we need to shrink government.
Alison Acosta Fraser is director of the Roe Institute of Economic Policy Studies at The Heritage Foundation.