Want Economic Growth? Remove Government: Author
Even as the U.S. economy seems to be picking up steam when it comes to jobs and housing, many economists are projecting moderate growth in 2013.
Brook, president of the Ayn Rand Institute, joins The Daily Ticker's Aaron Task in the accompanying interview.
"We are clearly heading in the wrong direction," says Yaron, a Randian disciple and a staunch supporter of non-government intervention in capital markets.
"Long term the real problem, and the real reason why people are not investing, is not because of uncertainty, it is because of certainty," says Brook. "We know what is going to happen. We know government is increasing. We know government is going to intervene in the economy even more."
One prime example he cites are taxes, which he says "are going up on the most productive people in our society."
He says the following policy actions would go a long way to boosting economic growth:
Eliminate all subsidies and tax credits. "The flip side of that is take all the deductions out of the tax code but then lower the tax rate, the corporate tax rate," he says, suggesting that the corporate tax rate should really be zero anyway. "Because who pays corporate taxes? Consumers do."
Reduce and/or eliminate regulations. He cites examples like the Dodd-Frank financial reform bill, the Affordable Care Act and Sarbanes-Oxley.
Engage in significant entitlement reform. In his new book Brook writes, "By sapping immense amounts of capital from productive individuals, the entitlement state cuts down on the number of businesses that get launched, the number of jobs that get created, the amount of economic progress that takes place, the amount of economic opportunity that is available."
Brook concedes that his policy prescriptions will never take hold in Washington. But "we need to reverse course and start moving towards economic freedom," he says.
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