And the money Washington spends on such ineffective programs doesn’t materialize out of thin air. As the federal government borrows more, there’s less money available for business owners to tap. That means they’re less likely to expand and hire.
Of course, for anyone who’s out of work, the cause of high unemployment isn’t as important as the effect. Most of these people just want to find work. Our federal policy should be geared to make that easier.
Instead of another “stimulus,” lawmakers should begin by reducing the corporate tax rate. The U.S. rate is second only to Japan’s -- another country that’s failed to create enough jobs in recent years. Heritage Foundation analysts have found that reducing the corporate tax rate from 35 to 25 percent, while keeping the capital gains tax at 15 percent, could create an average of at least 2 million jobs a year over the next decade.
Lawmakers should also get their spending under control. They could implement a freeze on new spending, and rescind all unspent stimulus money. And instead of passing new laws and regulations, they could scale back existing restrictions, such as Sarbanes-Oxley, that make it more difficult to grow a business.
Federal Reserve Chairman Ben Bernanke recently told Congress that, while there are signs of economic growth, “a significant amount of time will be required to restore the 8.5 million jobs that were lost during the past two years.”
That’s why lawmakers should make it easier for businesses to create more positions and hire more workers. For Washington, that’s truly Job One.