With the standard monetary and fiscal policy tools "maxed out," is there anything the government can do to jumpstart the U.S. economy? Yes, says economist Ken Mayland, roll back "stifling" regulations "at virtually no cost to the budget deficit."
Mayland, president of Clearview Economics, on Sept. 7 told the Impact Manufacturing Forum, sponsored by BCG & Co., an Akron, Ohio accounting and consulting firm, that the recovery has been "slow and cautious" and that over the past year, the momentum of the economy has been "steadily slipping."
Mayland said the economy's poor performance is the result of the intersection of economic forces and poor policy choices with regard to fiscal and monetary policy, housing, energy and regulations. For example, he said more than 600 regulations were added in July 2011, and that the regulatory buildup was strangling and stifling business."
Mayland said that the federal government, either through executive orders or simple legislation, should take the following steps:
- Kill the 2010 health care reform bill.
- Do a "reverse course" on developing domestic energy and ease access and permitting for all forms of energy production.
- Eliminate the minimum wage. Mayland said: "Economists have long know that politicians cannot legislate the productivity of a worker. If you raise the minimum wage above the basic productivity of the worker, the worker will be fired or not hired." Mayland said since the minimum wage was last raised, the biggest increase in unemployment has been among teenagers -- "exactly where you would expect a minimum-wage increase to hurt."
- Repeal the Frank-Dodd financial reform law and Sarbanes-Oxley, which he said put U.S. businesses at a disadvantage compared to businesses in other countries.
- Rein in EPA and the National Labor Relations Board.
- Pass free-trade agreements with Panama, Columbia and South Korea.
- Pare back overly generous unemployment benefits from the current 99 weeks. Mayland cited a scholarly study that if unemployment benefits were 26 weeks, the unemployment rate would be 2% to 2.5% lower.
- Trash the tax code and install a flat tax. Mayland said once the appropriate tax rate was determined, taxpayers could fill out their tax return "on a postcard."
Summing up his outlook for the near future, Mayland said economic growth will remain disappointing, unemployment will remain chronically high and major improvements will have to wait until after the 2012 election.