Vail Valley Voices: Free enterprise leads to solutions
Before our economy can be turned around the president and Congress must realize two unalterable economic facts of life.
First, economic policies must be viewed in terms of the incentives they create rather than the goals they proclaim.
Second, any changes to our tax code must lower rates while expanding the base.
But the latter is no simple matter, so while this Congress or the next grapples with overhauling the tax code, if implemented, the following three suggestions could jump-start the economy and put us on the road to recovery right now.
First, focus attention on the areas of the economy that need it the most. The unemployment rate for black adult males is 17.5 percent and for black teenagers it’s nearly 41 percent.
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Therefore, the creation of “enterprise zones” for this demographic might be a good place to start. The government could provide special tax and regulatory relief to encourage investment in new businesses and new construction in these areas.
Congress should then eliminate payroll taxes on both employee and employer in these zones, and at the same time suspend federal and state minimum wage regulations to stimulate hiring.
Congress should also consider dollar-for-dollar tax credits for all charitable contributions going into these areas, and issuing school vouchers so all the children in these areas are able to attend the school of their choice.
Second, repeal Obamacare. Its uncertainty and higher costs, that will begin appearing next year, are job-killers. At the same time, any replacement legislation must be written so that it applies equally to all Americans, including President Obama and the Congress.
Congress should also introduce more competition in the health insurance arena by allowing insurance carriers to sell policies across state lines.
Additionally, studies have shown that in order to keep themselves from being sued, many doctors order unnecessary tests, procedures and referrals as a matter of defensive medicine. It’s been estimated these tests and procedures increase health-care costs by $200 billion a year.
To redress this situation, the government could create a medical injury pool with congressional oversight to compensate people due to a physician’s omission, mistakes or accidents. This pool could be funded by adding a small tax to everyone’s insurance premiums. In doing so, we could eliminate juries that are prone to give away multi-million dollar awards by stipulating that all adjudication is to be done by a panel of medical experts.
Such a protocol would spread the cost of actual malpractice, eliminate the need for medical malpractice insurance, eliminate trial lawyers from the equation, and save $200 billion in unnecessary defensive medical costs.
It can be argued that in today’s world doctors are immunized from negligence by malpractice insurance. However, under the aforementioned plan, patients would be protected because offending medical practitioners would face a federal peer review board that could impose fines or even revoke medical licenses for the truly egregious errors.
Third, this nation is nowhere near replacing fossil fuels with wind or solar or anything else. So perhaps the government should begin by providing really big incentives for any person or entity that successfully develops a viable alternative source of energy.
Two things are certain with regard to energy:
1. There is enough oil and natural gas within the borders of the United States (including the continental shelf) to supply our energy needs for several hundred years.
2. The United States is going to use X amount of energy regardless, which means our government has a choice to make. Do we satisfy our energy needs with foreign or American oil?
According to a 2008 U. S. Geological Service report, the Energy Information Administration estimates that there are more than 500 billion barrels of oil in the western Dakotas and eastern Montana (the Bakken), begging the question of why aren’t we creating jobs and reducing our energy dependence by exploiting this existing natural resource?
Each year extracting energy becomes safer and more reliable — if done properly, environmental impact can be minimized. For example, the Arctic National Wildlife Refuge comprises 19,000,000 acres, but with current technology, the actual “drilling footprint” would be about 2,000 acres (the size of Los Angeles International Airport), which is less than 1/1000th of 1 percent of ANWR.
Opponents of expanded American energy production remind us of the recent Gulf oil spill — a fair argument. But then they fail to mention that the reason we’re drilling so far offshore (where the risks of spills are greatest) is because of government regulations. Meanwhile, there are millions of barrels of oil much closer to shore (where drilling is safer) that remain untapped.
Unleashing the full potential of American oil production would create hundreds of thousands of jobs and at the same time reduce oil prices. The government could then tax a percentage of the difference (the savings from reduced oil prices) and dedicate those funds exclusively for the research and development of alternative forms of energy.
Solutions exist to the problems facing us. The common denominator in each example is less regulation and more free enterprise.
Quote of the day: “Free enterprise has done more to reduce poverty than all the government programs dreamed up by Democrats.” — Ronald Reagan
Butch Mazzuca lives in Edwards.