Principles for Effective Jobs Plans

Fri, 2011-09-02 14:50 | Economy | Douglas Holtz-Eakin
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Principle 1:  No U-Turns

Provide long-term stability for job creators by implementing permanent, pro-growth policies; not temporary “stimulus” that gets turned on and needs to be turned off.

Principle 2:  Focus on Businesses and International Competitiveness

Households and governments are awash in red ink and cannot be expected to power the recovery.  Unleash the potential of our businesses whose balance sheets are strong and boost foreign sales.

Principle 3:  Attack the Debt Explosion

The nation is headed directly for a fiscal crisis – the most anti-jobs policy possible.  Any jobs program must reduce the debt

Principle 4:  Reduce Uncertainty over Future Policy

Immediate, permanent reforms provide maximum policy clarity.  For policies that are not immediate, clear timetables and automatic implementation are desirable.

Translating Principles to Policy: Examples

Do

Don’t
  • Reduce the corporation income tax rate or allow tax-free repatriation – steps toward fundamental reform.
  • Ratify existing trade agreements or eliminate tax on repatriated earnings.
  • Repeal the Affordable Care Act.  Reform Social Security and Medicare to make programs sustainable for future generation and reduce future red ink.
  • Cut the corporate rate now, eliminate the tax on repatriated earnings, and broaden base according to a legislated timetable.
  • Provide a temporary credit for new hires.
  • Focus on temporary household tax cuts.
  • Create a new, permanent infrastructure bank with mandatory spending authority or additional, overlapping training program.
  • Close loopholes and raise revenue without a commitment to reduce marginal rates and complete tax reform in future.