Read Online A Simple Government by Mike Huckabee - Free Book Online Page B
Authors: Mike Huckabee
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if Ben Bernanke is right that we can’t entirely grow our way out of the current economic mess, we must wring every last drop out of growth that we can. That means creating as many jobs as we can, and job creation requires funds for new businesses to start up and existing businesses to expand. Even though small businesses create about 70 percent of our new jobs, they have more trouble getting credit than medium-sized and big businesses. They are therefore affected more seriously by our growing deficits and debt, which soak up available capital and drive up interest rates.
According to the Kauffman Index of Entrepreneurial Activity, all of the approximately forty million net new jobs between 1980 and 2005 were created by firms that had been in business for only five years or less. They also found that if we take firings and layoffs into account, older companies added almost no net new jobs during the same period. Yet it’s harder for small start-up businesses to get financing than it is for established companies; moreover, because of the greater risk of failure, they have to pay higher interest rates just to get off the ground. As long as the government continues nutty policies that hinder or hurt small businesses, the existing factors do not bode well for job creation.
It doesn’t take Nostradamus to predict the future we’re facing. As the interest on our national debt pushes interest rates for the private sector ever higher, many businesses will never get started, and others will be unable to grow to their full capacity. In other words, there is really an inverse correlation between our national deficit and our future economic growth. Unfortunately, it couldn’t be simpler to understand: As interest rates rise in order to finance growing government debt, fewer and fewer new jobs can be created, and that situation in turn depresses revenues and adds to the debt, which in turn pushes interest rates up even higher.
What’s the Solution?
Why not just “tax the rich”? After all, we certainly hear that a lot from the White House and from a certain side of the aisle in Congress. But we have to consider one simple fact: The top 1 percent of American taxpayers now pay more than all of those in the lowest 95 percent combined. What more can they be expected to contribute? Meanwhile, about half of us pay no taxes at all—a very unhealthy situation. Almost everyone should be contributing at least something to the pot; those who don’t contribute have little reason to care about what is done with everyone else’s investment.
I’d say that representation without taxation is as threatening to our national character as taxation without representation. Those who don’t pay taxes—that is, who are not pulling their weight in the community—have no real reason not to vote for more and more government services. And that will lead to more and more dependency, making the country more and more like a European welfare state. At times, a safety net is essential, but it must not be used as a hammock that can lull us into lethargy. This country was built by personal responsibility, work, and risk taking.
Maybe you personally don’t have a philosophical objection to raising taxes. But practically speaking, there is no way we can tax our way out of the current situation. As taxes are raised, growth of the GDP is cut, basically killing the geese that lay our golden eggs.
So what’s the solution?
When you come down to it, the answer is very simple (as the title of this chapter hints): Do not spend money that you do not have. Of course, even the simplest idea can be extremely difficult to execute. After all, temptation has been a human problem since Eve ate the apple in the Garden of Eden. It was certainly enticing a few years ago, if you were living in a modest tract home, to be assured that you could easily afford a fancier house in a more upscale neighborhood, even if, in your heart, you suspected that you really couldn’t. Too
According to the Kauffman Index of Entrepreneurial Activity, all of the approximately forty million net new jobs between 1980 and 2005 were created by firms that had been in business for only five years or less. They also found that if we take firings and layoffs into account, older companies added almost no net new jobs during the same period. Yet it’s harder for small start-up businesses to get financing than it is for established companies; moreover, because of the greater risk of failure, they have to pay higher interest rates just to get off the ground. As long as the government continues nutty policies that hinder or hurt small businesses, the existing factors do not bode well for job creation.
It doesn’t take Nostradamus to predict the future we’re facing. As the interest on our national debt pushes interest rates for the private sector ever higher, many businesses will never get started, and others will be unable to grow to their full capacity. In other words, there is really an inverse correlation between our national deficit and our future economic growth. Unfortunately, it couldn’t be simpler to understand: As interest rates rise in order to finance growing government debt, fewer and fewer new jobs can be created, and that situation in turn depresses revenues and adds to the debt, which in turn pushes interest rates up even higher.
What’s the Solution?
Why not just “tax the rich”? After all, we certainly hear that a lot from the White House and from a certain side of the aisle in Congress. But we have to consider one simple fact: The top 1 percent of American taxpayers now pay more than all of those in the lowest 95 percent combined. What more can they be expected to contribute? Meanwhile, about half of us pay no taxes at all—a very unhealthy situation. Almost everyone should be contributing at least something to the pot; those who don’t contribute have little reason to care about what is done with everyone else’s investment.
I’d say that representation without taxation is as threatening to our national character as taxation without representation. Those who don’t pay taxes—that is, who are not pulling their weight in the community—have no real reason not to vote for more and more government services. And that will lead to more and more dependency, making the country more and more like a European welfare state. At times, a safety net is essential, but it must not be used as a hammock that can lull us into lethargy. This country was built by personal responsibility, work, and risk taking.
Maybe you personally don’t have a philosophical objection to raising taxes. But practically speaking, there is no way we can tax our way out of the current situation. As taxes are raised, growth of the GDP is cut, basically killing the geese that lay our golden eggs.
So what’s the solution?
When you come down to it, the answer is very simple (as the title of this chapter hints): Do not spend money that you do not have. Of course, even the simplest idea can be extremely difficult to execute. After all, temptation has been a human problem since Eve ate the apple in the Garden of Eden. It was certainly enticing a few years ago, if you were living in a modest tract home, to be assured that you could easily afford a fancier house in a more upscale neighborhood, even if, in your heart, you suspected that you really couldn’t. Too
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