How To Plot An Economic Recovery?

I am a software engineer by profession, and I know that the first step in solving a problem is first DEFINING that problem. So, let's look at that problem.

The "official" unemployment rate is 9.5%, but they get that low figure by eliminating those who have "dropped out" of the workforce... in other words, they gave up and stopped looking for work. Putting all of those people back into the mix, the unemployment rate is closer to 16%.

Businesses aren't hiring and they aren't expanding. That's the problem. Do you know WHY businesses are so reluctant to grow? I'll tell you in one word: government.

In the past two years, our Federal government has massively increased deficit spending and exploded the debt into the never-before seen $13 TRILLION range. The government also printed vast quantities of money. The result is that interest rates are being held artificially low, but when they DO rise, our payments on the debt will increase to unsustainable levels.


In addition to this economic uncertainty, Congress has decided to make the life of the average businessman harder. For example, the ObamaCare law contains an obscure provision that will require businesses to file 1099 forms for every company or person they spend more than $600 with in a year. In other words, they added a massive amount of paperwork and overhead for each and every business in the country. The more business you do, the more products you carry, the heavier is the paperwork burden.

And that is just the tip of the regulatory iceberg. With first ObamaCare and now the Wall Street "reform" bill, massive amounts of new regulations affecting businesses will be drafted and enforced. It should be easy to see why businesses are wary of such things. Also being talked about is an energy tax in the form of "cap & trade" that will ALSO be bad for businesses.

And now let's talk about taxes. ObamaCare contains taxes on individuals and businesses, as well as the well-publicized fines and penalties for this and that. We're going to see massive tax increases at the end of the year, one of which (increases in the income tax brackets) will impact the bottom line of businesses across the board. And new taxes are continually being talked about and proposed, including some sort of consumption tax (such as the VAT) being levied IN ADDITION TO the income tax.

And all of these laws, regulations, and taxes are being implemented as spending skyrockets with no end in sight. Indeed, the tax increases were passed specifically to ALLOW more spending, and all of what Congress laughingly calls "spending controls" are being willfully ignored as the elected sailors in Congress swill their rum and blow every penny that they took from us... not to mention a LOT more.

All of these regulations, laws, and taxes make it harder and more expensive to do business. So is it any wonder that businesses are reluctant to increase their size and scope? And the fear of the unknown taxes and regulations that will be passed in the near future contribute to this. If you want businesses to grow and hire, you don't start by making it harder and more expensive to do business.

So, that's the problem. What is the solution?

Because this problem was partially caused by these factors and is being perpetuated by government policy, the best solution is to reverse government policy.

Why don't we try making it easier and less expensive to do business? We can start by rescinding that ridiculous 1099 requirement, and then scaling back government spending. We need to put strong and unavoidable limits on spending in place, and then start scaling back. We need to reform the budgeting process and remove the "automatic growth" feature that many programs, especially entitlement programs, enjoy. We need to start removing a lot of the regulatory mumbo-jumbo that does nothing beyond making it harder for businesses to operate.

Only by making it easier and cheaper to do business will our economy really take off.

So now you know... that's the goal. Bigger government interferes with private-sector growth, so we need to reverse things and get government out of the way. The alternative is not just the status-quo, but a worsening economy as the new regulations and tax increases begin to really take effect.