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Economics Discuss Arthur Brooks: Top 10 ways government kills jobs in America at the Political Forums; Arthur Brooks: Top 10 ways government kills jobs in America | Washington Examiner 1. Uncertainty and business: What you don’t ...

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Old 10-20-2010, 11:22 PM
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Default Arthur Brooks: Top 10 ways government kills jobs in America

Arthur Brooks: Top 10 ways government kills jobs in America | Washington Examiner
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1. Uncertainty and business: What you don’t know can (and does) hurt you. Businesses plan around rules. And they are unlikely to invest if they can’t be reasonably sure about what the rules will be. When things are uncertain, businesses hold back cash to protect themselves—and this kills jobs. My colleague Allan Meltzer has made this point in two recent WSJ op-eds: “High uncertainty is the enemy of investment and growth,” he declares in one. “The most important restriction on investment today is not tight monetary policy, but uncertainty about administration policy,” he argues in the other.

2. Uncertainty and the consumer: Uncertainty isn’t just bad for companies—it’s bad for consumers, too. If I think government policy may provoke a double dip in the economy and my job is on the line, there’s no way I’m going out to buy a new car. For that matter, even the possibility of a huge gas tax would make me less likely to make a car purchase decision. All this kills jobs.

3. High corporate taxes: Americans are shocked to learn that we have some of the highest corporate taxes in the world. In fact, Japan is the only developed country with a higher corporate tax rate than the United States. Whether we like it or not, the corporate tax is a tax on jobs. It makes it more expensive for firms to function, which costs jobs. But even worse, it drives companies to find more tax-friendly environments in other countries.

4. Unhealthy health insurance costs: The high health insurance costs associated with hiring new workers hits small businesses particularly hard, according to AEI economist Aparna Mathur. Government health mandates specify exactly what kinds of coverage have to be included in insurance policies. This makes increasing headcount a costly exercise, and so kills jobs. One major CEO told me recently that his hiring was stunted by the new mandate to cover workers’ kids up to age 26.

5. The threat of unionization: In a global economy, it’s fairly simple for a lot of firms to avoid unionization: They can move overseas and take their jobs with them. Policies that favor unions make this decision more attractive.

6. Inability to hire and fire: In Europe, government regulations and employment protection laws reduce the flexibility of firms to downsize their operations when they need to. They also discourage those same firms from upsizing their operations when they would otherwise do so, and are thus a job killer. This is why Spain has a 20% unemployment rate (and about 40% among workers under 25). Restrictions on firing are a job killer.

7. Trade restrictions: Free trade favors consumers everywhere, and benefits workers in industries where America has a comparative advantage. Tariffs and other barriers benefit industries that are already in decline. This is why economists always tell us that over the long run, trade barriers and slow modernization are a net job killer.

8. Credit: Poor credit access especially hurts new and young firms that are eager to expand their operations. The new Consumer Financial Protection Agency could make matters worse by expanding burdensome regulation of these financial markets, killing jobs in the process.

9. Increasing unemployment insurance: Everyone wants to ease the burden on the unemployed, so it is tempting to extend unemployment insurance, as our government has recently—today, to as much as 73 additional weeks. Unfortunately, this kills jobs and economic recovery. Harvard economist Robert Barro estimates that if unemployment insurance had not been expanded, the unemployment rate would now be 6.8% rather than 9.5%.

10. Encouraging frivolous lawsuits: This increases the costs of doing business in America, with one study estimating that we waste as much as $900 billion a year on excessive tort litigation—that’s 6.5 percent of GNP or $12,000 annually for a family of four. As a result, company capital that could be used for expansion and job creation goes to the trial lawyers instead. And like so many anti-business measures, such litigation drives up costs for consumers, which reduces demand and kills jobs even more.
Mr. Brooks has successfully introduced hammer & nail by having hammer repeatedly hit nail directly on the head.
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Old 10-21-2010, 10:33 AM
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Default Re: Arthur Brooks: Top 10 ways government kills jobs in America

I wish there were some points to argue, but there aren't.
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Old 10-21-2010, 02:29 PM
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Default Re: Arthur Brooks: Top 10 ways government kills jobs in America

Quote:
1. Uncertainty and business: What you don’t know can (and does) hurt you. Businesses plan around rules. And they are unlikely to invest if they can’t be reasonably sure about what the rules will be. When things are uncertain, businesses hold back cash to protect themselves—and this kills jobs. My colleague Allan Meltzer has made this point in two recent WSJ op-eds: “High uncertainty is the enemy of investment and growth,” he declares in one. “The most important restriction on investment today is not tight monetary policy, but uncertainty about administration policy,” he argues in the other.
2 through 10, why all valid, are much smaller compared to number 1...This is the "big picture" answer...
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