A Challenge to National Leaders

The private sector has a role to play

Back Commentary Sep 1, 2010 By Winnie Comstock-Carlson

Critiquing the federal government is something I usually consider outside my bailiwick. After all, what can I do sitting here in my Sacramento office to influence the actions of our president and Congress?

But I am so outraged and so concerned about the state of our nation that I simply must speak out.

Think back a few decades to the Reagan administration, a time when the nation faced another nasty recession. In the late 1970s and early 1980s housing sales plummeted while interest rates, oil prices and inflation soared.

Unemployment was 16 percent by 1982 when the newly elected president asked a group of 161 private-sector executives to lead a study into federal government operations, exhorting them to “work like tireless bloodhounds” to find ways to “get government off (Americans’) backs.”

Two years later the so-called Grace Commission reported its findings — that one-third of taxes were consumed by waste and inefficiency — and proposed nearly 2,500 cost-cutting measures that could save some $100 billion annually. The commission warned that unless changes were made, the federal debt would hit $13 trillion by 2000. Happily, many changes were made — enough to slow spending and free up economic growth for a decade or two.

Yet again we are overwhelmed by government spending, regulation and taxes. More than 16 percent of American workers are unemployed, underemployed or have simply given up on finding work. And we have just topped the $13 trillion mark in national debt.

Unhappily, too, we have a president and Congress who seem to have little understanding of the role the private sector must play in reviving our faltering economy. We hear the rhetoric: All agree that jobs and economic growth comes only from the private sector, not from government.

But we don’t see actions to back up the rhetoric. We don’t see creative ideas for encouraging entrepreneurship or supporting the health of small businesses. Instead, we see our leaders continuing to expand government, increase taxes, incur larger deficits and propose stifling regulation.

What we need is our own version of the Grace Commission: Executives from business, the professions and nonprofits scrutinizing every major government program and a proposal to determine whether they help or hinder job creation. Nothing, however worthy, should be enacted or continued if it proves to be a job killer.

More than 16 percent of American workers are unemployed, underemployed or have simply given up on finding work.

What we need are creative ways to encourage entrepreneurs and small businesses, the engines of job growth. There is no dearth of good ideas for doing so in our local business community:

Invest in a new company between now and the end of 2012, and pay no capital gains tax on those investments.

Create startup enterprise zones for technology and manufacturing companies with tax incentives for landlords and utility companies who serve the zones.

Create tax incentives for benefits companies (health insurance, private pension packages, etc.) to provide benefit packages to startups.

Eliminate income taxes for the first five years for startups.

Streamline startups’ licensing of technology and products from academic institutions.

Only ideas such as these will help America create the 20 million jobs needed to employ its workers over the next decade. We in the business community know the truth of this. We simply must speak up strongly enough to convince our leaders of its truth, or we must elect new ones.

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