America in 2012: Economy and Jobs

Last night, I watched a town hall meeting featuring presidential candidate Mitt Romney.  I'd never seen him speak outside of a formal debate, yet his polished demeanor was very impressive.  He came across as genuine and knowledgeable, especially when he spoke about the direction of the US economy.  Now, I am not expressing my endorsement for Mr. Romney quite yet, but his ideas are a step in the right direction to pulling the American economy out of its funk.

During the 2008-2009 recession, the unemployment rate almost doubled from around 5% to 9.8%, and it hovers around 9% as we enter 2012.  Economic policy makers recognized the sharp rise in unemployment and introduced a stimulus package along with an unprecedented rise in government spending.  To spend money, the government took on more debt to the extent that everyone is now wondering whether America will ever be capable of paying down its enormous federal debt.  The increase in the size of government has meant higher tax rates and more regulations on individuals and corporations.  Businesses have cut back on hiring new employees due to uncertainty about the the future of regulations in the economy.    

Instead of accepting responsibility and moving forward, Americans are playing the blame game.  The Occupy Movement has targeted the wealthiest 1% of Americans as those guilty of dampening economic growth.  The argument is that taxing the richest Americans will partially solve the soaring federal debt.  The reality is that the best way to alleviate long-term government deficits is to reduce spending.  Businesses will not want to hire if there is discussion of increasing corporate tax rates or even keeping corporate tax rate around 35%.  Other policy discussions such as repealing the Patient Protection and Affordable Care Act, which has been popularized as Obamacare, have become a subject for debate among Republican candidates.  There is no question that this legislation has frozen hiring as businesses wait to see what economic consequences lie within.  What other legislation has made businesses concerned?  The Dodd-Frank Act was enacted in 2010 to ensure that the financial industry is heavily regulated with new provisions on hedge funds, new definitions of accredited investors, and required reporting by all public companies on the disparity between salaries of the CEO and median employees.  Yet the recent demise of MF Global is a piece of evidence against the success of the the Dodd-Frank Act.    

I certainly don't claim to have all the answers, but I'm not alone in thinking that America cannot take 4 more years of these harmful economic policies.  Letting entrepreneurs create business without worrying about the massive burdens on raising capital is a step in the right direction.  Ending unnecessary and disastrous regulations will also help America as we emerge from this recession.