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DECKER: 5 Questions with Steve Forbes
‘Big Government threatens our economy and democracy’
Question of the Day
Decker: As the son of an executive at one of America’s 10 largest companies, I grew up believing that the business of America is business. It now increasingly seems that government is the senior partner in the public-private-sector relationship. How is today’s out-of-control bureaucracy a drag on U.S. competitiveness and the entrepreneurial spirit that made this country great?
Forbes: Out-of-control Big Government hurts our competitiveness in various ways. Excessive regulation, for example, suffocates a market. Entrepreneurs are less able to get credit or loans as a result of overreaching laws like Dodd-Frank that are inhibiting lending and killing community banks. It becomes harder for the Apples and Microsofts of tomorrow to start up. Too much government also results in capital-destroying taxation. You get cost-inflating laws like Obamacare, which harshly penalizes companies and individuals for not having health insurance. Companies have less money to grow and hire people. It becomes more difficult to get traction and succeed in the marketplace.
In a free market, people invest in technologies that actually work and have been shown to meet real world needs, like the auto or the personal computer. But when Big Government dominates an economy, resources are allocated based on the interests of politicians. Taxpayer money is poured into politically popular causes — like “green jobs.” The result is fake innovations like the Chevy Volt, a car that was too expensive and impractical to appeal to consumers and ended up failing in the marketplace. Big Government also encourages cronyism. Politically powerful corporations and individuals get preferential treatment. You end up with companies like Solyndra, which received government support because individuals associated with it raised money for the president’s campaign. All of this hurts our competitiveness. Capital and manpower are wasted and diverted from better technologies that are never developed.
Decker: What do you think is the most imminent threat facing the United States today, and what should be done to address the problem?
Forbes: Our most imminent threat is today’s over-expanded Big Government, both at the federal and state level. It’s not financially sustainable and threatens our economy and democracy. The social unrest in Greece is what you get when too much government kills an economy and corrupts a society.
America today is like an over-expanded corporation in need of restructuring. Contrary to what the statists want you to believe, it can be done with some common-sense reforms, without throwing granny or anyone else over a cliff.
A first step would be to repeal Obamacare. That alone would eliminate more than 150 unnecessary bureaucracies. The way to real health care “fairness” is not government rules and rationing, but a consumer-driven market where you, the patient, make buying decisions, not your insurer or employer. Then we have to reform entitlements. We can restructure both Medicare and Social Security. Amazingly, we have enough wealth to provide the benefits for those on these programs, as well as those about to go on them. But positive change is necessary for younger people. The bulk of their payroll taxes would go into personal accounts with proper safeguards. That way, we turn two liabilities into capital-creating assets. Those payroll taxes would be invested in the real economy rather than spent immediately by Washington politicians. Individuals would be able to decide on their own health care plans and investments.
Other pro-growth reforms would increase government tax revenues needed for these programs by stimulating the economy. One would be to adopt, yes, a flat tax. It would go a long way in achieving the prosperity that Mr. Obama never achieved with his monstrous spending. A flat tax would reduce taxes for many people. It would remove the enormous hidden tax of the compliance costs, freeing up enormous human and financial resources that can be invested in new jobs and businesses.
Returning to a gold standard is another much-overlooked reform. Most people today, including most politicians, fail to appreciate how our current system of fluctuating currency values is a drag on the economy. People can’t decide to invest or trade because they can’t be sure of currency values and what things are worth.
Supporters of Big Government keep insisting that the only solutions to today’s problems are higher taxes and more government. But if more government were the answer, we wouldn’t be seeing unrest in Europe today. And the Soviet Union and not the United States would have won the Cold War.
© Copyright 2014 The Washington Times, LLC. Click here for reprint permission.
About the Author
Brett M. Decker, former Editorial Page Editor for The Washington Times, was an editorial page writer and editor for the Wall Street Journal in Hong Kong, Senior Vice President of the Export-Import Bank, Senior Vice President of Pentagon Federal Credit Union, speechwriter to then-House Majority Whip (later Majority Leader) Tom DeLay and reporter and television producer for the legendary Robert ...
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