I'm not suggesting that the author's ideas will be implemented. But, if they were, wages would stagnate or go down. Corporate expenses would decrease (in taxes, anyway)... States, Cities, etc would have less expense. Even property taxes could decrease in this scenario.
Alternative Mish Proposal
I am all in favor of reducing the deficit. Indeed Ryan's plan falls way short of what is needed. However, if the goal is to create jobs, the way to do that is fix structural problems. Rand Paul has the right idea with right-to-work laws. We also need to scrap Davis-Bacon and all prevailing wage laws.
Those proposals would allow cash-strapped cities and states to rebuild infrastructure at less cost or (and this is key), hire more workers for the same cost and get more work done.
My four proposals for creating jobs are
- National right-to-work laws
- Scrap Davis Bacon and all prevailing wage laws
- Set corporate tax rates substantially lower in the US than overseas
- Eliminate entire bureaucracies such as the department of education and the department of energy
My proposal is far better than Ryan's proposal in terms of creating incentives for bringing jobs back to the US and for helping cash-strapped states rebuild infrastructure.
However, there is no chance what I suggest would come close to lowering the unemployment rate to 4% in 4 years either.
Let's see what if anything the Heritage Foundation has to say about those ideas.
Mike "Mish" Shedlock