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Growth Is The Solution - Tax Reform The Mechanism September 13, 2017 1:00 PM | Tagged as Gramm

WSJ 10 September 2017 – “Finding America’s Lost 3% Growth” By Phil Gramm and Michael Solon

Gramm and Solon have argued convincingly a sad commentary. Without a steady GDP growth of at least 3%, we will lose the American dream.

Why have we had such anemic growth for eight years? Did America change? Have we lost our economic mojo? Some are saying the days of 3% growth are irretrievably gone.

The policies of the Obama administration caused this anemia. It averaged 1.47% for Obama’s eight years.

From the referenced article, “A tidal wave of new rules and regulations across health care, financial services, energy, and manufacturing forced companies to spend billions on new capital and labor that served government and not consumers. Banks hired compliance officers rather than loan officers. Energy companies spent billions on environmental compliance costs, and none of it produced energy more cheaply or abundantly. Health-insurance premiums skyrocketed but with no additional benefit to the vast majority of covered workers.”

In just a few months, merely by reducing unneeded regulations, our economy grew in the 2Q17 by 3% again. If Congress can find the ability to enact real tax reform, The Biz Bucks Guy predicts GDP will grow beyond the 3% standard that many are looking for.

With Obama’s higher capital gains tax rates, investment in capital has slowed and is only equaling depreciation. This means the net capital per worker did not change. Capital investment is a major part of the engine that drives growth.

To quote Gramm and Solon, “America without 3% growth is not America…With 3% growth, the American dream is achievable and virtually anybody willing to work hard can live it. Let 3% growth die and a lot of what we love most about our country will die with it.”

It all starts with Congress passing tax reform. Lower tax rates generate GDP growth and more revenue for the government.

And of course, we also need the continued assault on unneeded regulations.

[Although opinion is included, The Biz Bucks Blog is primarily written to former students of Biz Bucks training courses to encourage their daily reading of the three opinion pages of the WSJ. This refreshes principles of Biz Bucks courses and improves business acumen on topics not discussed in Biz Bucks training.]

Posted By The Biz Bucks Guy
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