Following today's edition of "This Week" tackling the topic, "America's Economic Recovery: Is It Built to Last?" we asked the panel participants to expand on their discussion. Here are their views.
|Paul Krugman: Taxes Are Not The Problem|
I had a lot of thoughts after the panel -- and I'm sorry to say, none of them optimistic. In fact, as the others can confirm, I left the set muttering "We're doomed." Yes, I was joking -- but not entirely. From my point of view, we had six smart, well-informed people discussing the most urgent issue of the day, and a clear majority of the panel was unwilling even to face up to the nature of the problem. Sorry to be so blunt, but that's what I saw.
Rather than give an exhaustive list of what left me feeling so down, let me take just one example. Carly Fiorina's remarks centered largely on what she sees as the burden imposed by excessive taxes on corporate profits. Now, leave aside the factual issues -- America does not in fact have the highest effective corporate tax rate in the advanced world, and there's very little evidence that tax rates have much effect on differences in state growth rates (it's mostly about housing costs).
More important, Carly more or less unintentionally gave the perfect counterexample, by citing Ireland's corporate tax regime as a model. There is a case for praising Ireland's low corporate taxes, and more broadly you can say that Ireland did a number of things right in its development strategy.
But right now Ireland is a disaster area! It's facing a Depression-level slump, with unemployment at almost 15 percent and youth unemployment twice that. And if you ask why it's stuck in that slump, you have to turn to issues that have nothing to do with taxes or anything else that anyone on the panel except Jennifer Granholm and I wanted to talk about -- lax financial regulation, tight monetary and fiscal policy.
To me, it seems that you couldn't ask for a better demonstration that the things we need to do right now, to fight the depression we're in, are very different from the concerns that dominate our discourse. When people respond to pleas for job creation by saying that we need to focus on the long run, they may sound sophisticated and realistic, but they're actually being naïve and, in my view, irresponsible.
Paul Krugman is a Nobel Prize-winning economist and New York Times columnist.
|Carly Fiorina: Small Businesses, Education, and Industry Leadership Will Power Growth|
I started out as a secretary for a small business that employed nine people. Most Americans start the same way. Women, African-Americans, Hispanics, Asian-Americans and wave after wave of immigrants have begun their ascent on the ladder of the "American Dream" in a small business.
And while every small business doesn't turn into a Google, the local car dealerships, restaurants, real-estate brokers, auto-repair and dry-cleaners are the foundation of our communities. Small businesses are responsible for the net new job creation of our nation over the last 40 years. America was built by innovators, risk-takers, entrepreneurs and dreamers.
So when we examine the health of our economy, we must start by asking how small business is faring. The answer: not well. More small businesses are failing and fewer are starting than at any point in the last 40 years. We are slowly undermining the entrepreneurial foundation of our country. Why? Because our tax code and regulatory structures have been written, negotiated and gerrymandered by big business, big labor, and big government.
The thicket of complexity has become too impenetrable to navigate for too many. We should lower all tax rates (we now have the highest business tax rate in the world), close all loopholes (which will raise revenues and increase the effective rates for the wealthiest 1 percent) and make sure that anyone can fill out a tax return for their business without the help of a professional accountant, lawyer or spreadsheet for hire. We should systematically go through every regulation on the books and eliminate every one that harms small business creation. Our whole perspective in Washington should change to one which starts with the entrepreneur in mind.
Over our history there have been two other fundamental lynchpins of American prosperity: rising levels of education and leadership in key industries. America continues to lag in both the quality and quantity of education we provide. The result today is many employers with jobs to fill cannot find enough qualified Americans to fill them. With 5.5 million Americans unemployed, this is a tragedy.
We can only solve this problem by taking a long-term view and fundamentally overhauling our educational system to bring it into the modern, 21st century world where any job can go anywhere to find a qualified employee. The vested interests that fight to maintain the status quo of our education system are costing too many Americans a chance at a job.
Finally, we must lead in the industries that will define our times and create the best jobs of the 21st century: information technology, health and bio-technology, energy and space. This requires government investment in basic research, a regulatory environment that encourages risk-taking and innovation in these sectors, and the political will to achieve American leadership.
Budget reform and entitlement reform are fundamental pre-requisites to any "built-to-last" recovery. These reforms will be both hugely difficult and hugely important. But neither will help lift an American out of poverty. Neither will help build our middle-class. Only a job, an education, and American economic leadership can do that.
Carly Fiorina is the former CEO of Hewlett-Packard and co-chair of Mitt Romney's California campaign.
|David Walker: Time For Truth, Leadership, and Solutions|
This week's economic panel was both stimulating and substantive. All the panelists recognized the need to address both short-term and structural challenges facing our economy. We need to take steps to enhance economic growth and reduce both unemployment and under-employment levels.
At the same time, we must address the serious structural challenges that we face if we want to ensure sustainable economic growth and enhance job opportunities over time. This will require a range of fiscal, education, energy, health care, immigration, infrastructure, research, regulatory and other reforms.
Based on the latest Social Security and Medicare Trustees report and this year's projected deficit, the federal government's financial hole is getting deeper by over $10 million every minute. We must make meaningful progress to defuse our ticking debt bomb in 2013 if we want to help ensure that a fiscal crisis will not hit our shores.
In the final analysis, we need to engage on a range of fiscal, operational and political reforms in order to keep America great and make sure that our future will be better than our past. The time for truth, leadership and solutions is now.
David Walker is former Comptroller General and Founder and CEO of the Comeback America Initiative.