Economic growth the key to future of America, GOP, and Fiscal Cliff
The union-instigated potential demise of Hostess has conservatives witnessing with bemusement the fruits of Obamism: striking union members facing job losses and unemployment checks. The only problem with Republican and conservative Twinkiefreude is that further economic decay and government dependence HELP ELECT MORE DEMOCRATS, which continues our downward spiral to doom.
The antidote to this demise, for the United States, and yes, the GOP, is more robust, real economic growth.
We saw it in the recent election. In the old model, a President running proudly on a “recovery” with 1.9% annual economic growth and the record unemployment it generates would be hounded out of office as an incompetent boob.
But in the new government dependency model of America, where Big Government offers “Julia” cradle to grave handouts paid for by others, it is precisely this economic weakness that drives more voters to the Party that promises more “safety net” (or what some accurately but perhaps unwisely call “gifts”).
We all missed this new truth in the months leading to the election, as we eagerly re-tweeted record food stamp spending, record Medicaid enrollments, record numbers of Americans receiving extended unemployment benefits. We saw each number as an indictment of the status quo that cried out for change.
But for the tens of millions receiving these benefits, any buzz about GOP discomfort with these costly programs was understandably seen as a threat to their immediate need to pay their bills: “One team will keep giving me stuff, and the other may not (though they assure me I’ll be better off long-term). I’m sticking with the sure thing.”
This sad reality puts the GOP at a disadvantage in negotiations with President Obama and the Democrats over the Fiscal Cliff and other economic issues. If our economy continues to be weak and tens of millions of Americans continue to be dependent on government welfare programs, it aligns these economically marginalized people more tightly with the Democrats, even if it is a form of Stockholm Syndrome.
It is only when these Americans become upwardly-mobile workers and, let’s hope, taxpayers who can imagine a raise and a promotion someday, that they can then be engaged on these broader issues: that our nation needs fewer people riding in the cart and more people helping pull it; that their own skills erode, and long-term prospects decline, the longer they let government keep them addicted to government programs; that unless they hate children, adding $1 trillion a year to their debt burden so adults can overspend today is just plain wrong; and that freedom and free enterprise remain the best hope for them and their families to achieve their fullest potential and lead a most rewarding life.
All true, but all nearly meaningless if you have a bill to pay and the Democrat Party pledges to take someone else’s money—or just borrow it and invoice America’s kids—and give it to you today to pay that bill. Democratic voters don’t even believe in capitalism anymore. Americans under age 30, Hispanics, and the poor, for example, all feel more favorable to Socialism than Capitalism. As Thomas B. Edsall recently noted in the NY Times, citing a Pew survey, “Hispanics … hold decisively negative attitudes toward capitalism, 55-32.”
But that means in everything the GOP does, the goal should be to increase real and sustainable economic growth. The world’s second largest economy, in China, is growing at about 8% a year. The Republican Party should establish as a national priority a minimum target of 4% annual private sector economic growth for the United States, up from the weak, sub-2% “new normal” under Obama. And it should be real, sustainable growth, not growth fueled by bubbles, like giving home loans to people with no hope of paying them back, or through borrowed “stimulus” spending.
How to get there? First, just having one of America’s political parties unequivocally make growth the top priority sends an important signal to job creators. Next, every week in session, Congressional Republicans should be putting forward legislation to promote economic growth, including, for example:
• Simplifying the tax code, including by lowering rates, in exchange for reducing deductions and special-interest carve-outs
• Increasing domestic energy production and ending the EPA’s war on US energy sources, including by green-lighting the Keystone pipeline
• A regulatory freeze: for example, a two-year moratorium on all new rule-makings that would impose greater than $50 million in annual costs to the economy; and a two-year freeze on enforcement of all $50+ million regulations put in place over the last five years
• Mitigation of Obamacare’s most egregious anti-growth and job-killing provisions; for example, those provisions that punish employers who exceed the 25- and 50-employee “cliffs,” and that encourage employers to limit workers’ hours to 29 or fewer, must be changed
• Reducing the rate of growth of federal spending, not just in the “out years” but in the current and next fiscal years, to send a signal to decision-makers in the private sector that our leaders are serious about reining in ruinous deficits
• A pledge NOT to bail out California, New York or irresponsible politicians in other states. They are bankrupting their states with give-aways to their government worker union allies, and through job-killing regulatory policies, with the expectation that other states’ taxpayers will be forced to come to the rescue. By signaling to these state leaders that they may not get the federal bailout they are counting on, it might encourage them to rein in their willfully destructive state laws that make a national economic recovery that much harder to achieve. I recently saw a TV ad paid for by New York State taxpayers claiming the state is friendly to business. Does anyone believe that?
This is obviously only a partial list. The point is, the need for robust economic growth must drive everything Republicans do over the next two years (and beyond), not just for America’s survival, but for the Party’s survival. Greek voters aren’t electing Tea Party conservatives (though if they had in years past, they would not be a nation in ruins today), and Americans dependent on government to pay their bills are likely to stick with their Democrat Sugar Daddy.
This further suggests that the GOP is adopting a posture on the Fiscal Cliff that is too narrow. It should be about economic growth, not just forestalling a cut to this defense program or an increase in that tax rate. The GOP should be expanding the issues on the table: why not include the Keystone pipeline in fiscal cliff negotiations? Why not a freeze on job-killing regulations? (Speaker John Boehner wisely signaled last week that Obamacare should be part of these negotiations.) Many of these pro-growth reforms would be scored by CBO as government revenue-enhancers, in that they would increase employment and economic activity, and thus generate more tax revenues. This should make it easier, not harder, to bridge the divide on the fiscal cliff.
If we hope to get more people pulling the cart and fewer riding in it, first we need a growing economy providing these folks with jobs that give them a vivid, personal stake in capitalism and free enterprise. That is the best hope for America, and the GOP.
The writer is a policy consultant who can be reached via Twitter.