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A Common Vision of the Problems Our Economy Faces

According to today’s conventional wisdom, bipartisan agreement is all but an oxymoron.  Yet when thoughtful policymakers and analysts take a broad view of the challenges facing the U.S. economy, there’s a surprising amount of commonality.

At a policy forum held by the Independent Women’s Forum this week, speakers from the Democratic Governor of Arizona, Janet Napolitano, and a Brooking Institute scholar to former Republican Governor of Michigan, John Engler, and an American Enterprise Institute analyst identified key priorities and goals for government.  They agreed that while there’s much to celebrate with the United States economy, massive challenges loom.  

Our broken immigration system burdens states with high healthcare and law enforcement costs due to the massive illegal population.  Yet that same immigration system keeps out some of the world’s most highly skilled workers (many of whom have been educated in the United States), the very workers whom companies crave.  

Despite our massive spending on elementary and secondary education, too many of America’s children receive a mediocre education that simply does not prepare them to compete with their peers internationally.  Scores released just this week on the International Student Assessment show that U.S. 15 year olds ranked 17th out of the 30 countries in the Organization for Economic Cooperation and Development (OECD) in science and 24th in math. The United States is clearly failing to prepare much of the next generation to participate and contribute to our increasingly knowledge-based economy.

The United States also has the second highest corporate tax rate of the OECD countries.  U.S. tax rates not only demand too much of companies’ money, but too much of their time.  The tax code is so needlessly complex that companies waste billions of dollars attempting to comply while minimizing their liability.  Regulations also stifle business.  In particular, well-intentioned laws like the regulatory regime known as “Sarbanes-Oxley,” which increased penalties for corporate malfeasance, mandated internal audit systems, and made executives personally and criminally liable for public financial reports, has cost companies billions and made America a less attractive climate for business.

Demand for energy is growing at a rate that outstrips supply.  Government impedes the development of domestic sources of oil but decries our dependence on foreign sources of oil.  Our nation’s entitlement programs, lead by Medicare and Social Security, which together consumer close to a trillion dollars each year, commandeer too large a share of our public resources and will only become more expensive as the baby boomers retire.  Overwhelmingly experts agree that our healthcare system, which ties insurance coverage to employment, puts people at risk and helps fuel rising healthcare costs.   

The consequences of all these failures of government policy are becoming more pronounced as the rest of the world becomes more competitive and our economy becomes more global.  Companies frustrated with high labor costs, a dearth of skilled workers, stifling regulations, or onerous taxes can often choose to locate elsewhere.   While U.S. citizens take for granted our economic preeminence, China’s rapidly growing economy will soon rival that of the United States.

The United States needs to address our business climate, encourage innovation, and ensure that the next generation has the skills to keep our economy growing.  Policymakers across the political spectrum recognize that the existing system fails in many important areas.

Of course, diagnosing our problems is the easy part.  And clearly conservatives and liberals tend to quickly part ways once they begin discussing the details of how to solve these problems.  Yet it’s important to remember that even in this age of supposedly fierce partisanship, there are areas of agreement and the desire for a growing, dynamic economy is shared by Republicans and Democrats alike.

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Written By

Ms. Lukas is the director of policy at the Independent Women's Forum. She is the author of "The Politically Incorrect Guide to Women, Sex, and Feminism" (published by Regnery, a HUMAN EVENTS sister company).

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