Economists Gary Becker and John Taylor join former Secretary of Labor George Shultz in calling for a strategy for economic growth, full employment, and deficit reduction — all without inflation.
"Experience shows how to get there," the trio write in The Wall Street Journal. "Credible actions that reduce the rapid growth of federal spending and debt will raise economic growth and lower the unemployment rate.”
House Republican budget planners are on the right track, and assuring businesses and individuals that current tax levels will not be raised would go a long way toward increasing investment, they say.
“Higher private investment, not more government purchases, is the surest way to increase prosperity," they say.
When private investment is high, the three note, unemployment is low. "In 2006, investment — business fixed investment plus residential investment — as a share of GDP was high, at 17 percent, and unemployment was low, at 5 percent," they say.
"By 2010 private investment as a share of GDP was down to 12 percent, and unemployment was up to more than 9 percent. In the year 2000, investment as a share of GDP was 17 percent while unemployment averaged around 4 percent."
"This is a regular pattern."
Reuters reports that chief U.S. tax collector Douglas Shulman says that budget cuts proposed by Republicans would have “potentially devastating" impact on the nation's tax system, including a drop in enforcement revenue by $4 billion for the rest of this year.
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