 Tom Grasson |
It’s hard to believe that 2010 is quickly coming to an end. For the most part, it has been a bittersweet year. The U.S. economic recovery clearly lost momentum as the year progressed. During the first quarter, real GDP grew at a 3.7% annualized rate. However, in the second and third quarter, GDP slowed to 1.6% per annum growth rate. The fourth quarter is forecasted to be in the neighborhood of 1.1% annualized growth.
While the majority of economists agree that the economy will continue to grow in 2011, they also believe it will expand at a much slower rate than what is needed to reduce the high unemployment numbers. A GDP growth rate of 1%, 2%, or even 3%, while welcomed, is not going to do much to create jobs. A growth rate of 5% to 5.5% is needed to get the ball rolling and the unemployment rate down. Unfortunately, no one seems to be taking the bull by the horns. Instead, all we see and hear is more bull.
Manufacturers are in agreement that incentives are needed to create growth opportunities. In fact, a national survey of 516 U.S. manufacturing chief financial officers and senior comptrollers, conducted by Grant Thornton LLP, indicates that most believe the best way to create new jobs is to cut corporate and personal tax rates.
“These findings are consistent with what we have been hearing from our manufacturing clients,” says Walter Gruenes, practice leader with Grant Thornton Manufacturing. “The indecision stemming from a weak economy and the unknown impact of governmental tax policy and new healthcare, labor, and environmental regulations on business and individuals is causing paralysis as it relates to major business decisions such as expansion, expenditures, and hiring.”
This being the case, I think it’s time a Congressional Reform Act is seriously considered. Both houses of Congress need to look in the mirror and take action consistent with the vision of our founding fathers, which means being citizen legislators who serve their term then go home and back to work.
This reform would include setting term limits of one six-year term for the Senate and three two-year terms for the House. There should be no tenure or pension. Legislators should receive a pay while in office but nothing after they leave. All past, present, and future Congressional legislators need to participate in Social Security and their current retirement funds should be transferred to the Social Security system. Legislators may purchase their own retirement plan – just like the rest of us do – and they need to participate in the same healthcare program that they passed into law. Last, but not least, all legislators must abide by all laws they impose on the American people.
I believe this proposed Congressional Reform Act would immediately create jobs and stimulate the economy because uncertainty and indecisiveness would no longer be a problem. As always, I’m interested in hearing your comments.
On another note, with the holiday season upon us, I, along with our entire staff would like to wish each of you a very Merry Christmas and a happy, healthy and prosperous New Year.
tgrasson@gie.net
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