How to strengthen the economy
January 18, 2008 | By Nathaniel Ward
Featured video
Bill Beach explains the pros and cons of an economic stimulus package |
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As it considers a plan to confront an economic slowdown, Congress should look to foster long-term growth and not enact short-term, counterproductive and after-the-fact measures, Heritage Foundation economist Bill Beach told members of Congress’ Joint Economic Committee on Wednesday.
» Read his full testimony on Heritage’s “Foundry” weblog
» Video: Bill Beach’s testimony
To achieve this long-term growth and thereby allow meaningful short-term recovery, he recommended that Congress:
- Make permanent the 2003 tax cuts and prevent harmful tax increases currently scheduled for 2009 and 2011;
- Ensure that any action on mortgages is limited, temporary, respectful of private property and that it does not extend new subsidies to the housing sector; and
- Address long-term spending challenges, specifically the liabilities of entitlement programs like Medicare, Medicaid and Social Security.
Many lawmakers favor a one-time giveaway of taxpayer money to “stimulate” the economy. Heritage’s Brian Riedl explains the problems with this approach in The Washington Times.
» Video: Beach explains how to avoid a recession
» Video: Bill Beach on the pros and cons of an economic stimulus package
While the prospects of a recession have increased somewhat, Beach continued, “we expect GDP growth in 2008 of around two percent, and monthly employment growth averaging 75,000 jobs. This is slow growth, but not a recession.”
Beach was the only conservative to testify before the committee. Others testifying included former Clinton administration Treasury Secretary Larry Summers and liberal economist Larry Mishel of the Economic Policy Institute.
What do conservatives look for?
What do conservatives look for in an elected official? Writing in National Review, Heritage Vice President Mike Franc picks a couple of the most important policy issues. He says conservatives would like a candidate who
- Commits to winning the war on terror;
- Confronts the coming fiscal crisis; and
- Makes the case for pro-growth economic policies and smaller government.
“A candidate whose instincts are correct on these three uber-issues,” he concludes, “will usually please conservatives on most other issues — be it health reform, education policy, or international development.”
Other Heritage research of note
- Heritage experts continue to provoke debate on the issues—in all parts of the globe. An article in Britain’s Telegraphused the new 2008 Index of Economic Freedom as the basis for a discussion about that country’s increasingly intrusive government; Britain dropped from the ranks of free economies in the latest ranking. And Lisa Curtis’ online article on Pakistan’s future in the Los Angeles Times sparked coverage in several Pakistani news outlets.
- Heritage national security expert James Carafano is in Hong Kong this week, visiting the city’s port. In a series of posts on the Weekly Standard’s “Worldwide Standard” weblog, Carafano looks at how the Chinese authorities screen cargo for terrorist threats—a critical step in ensuring American ports are secure. (Post 1; Post 2; Post 3; Post 4; Post 5; Post 6)
- The Supreme Court recently decided an important but overlooked business law case. Fortunately, the justices “ignored the call to create by judicial fiat a new ‘implied’ right for shareholders to sue any third party that does business with an allegedly corrupt corporation whose stock the investors own,” Heritage legal experts Robert Alt and Brian Walsh write on National Review Online. Under this dubious proposition, it would effectively be open season for lawsuits against businesses.
- Frequent religious service attendance increased the likelihood of marriage among unwed mothers, according to a study recently highlighted on Heritage’s FamilyFacts.org.
In other news
- America’s birth rate has risen to the highest level in 45 years. Birth rates were up among whites and other ethnic groups, though especially among those of Hispanic descent.
- The Bush administration has overridden a court decision that limited the Navy’s ability to use sonar. Radical environmentalists had successfully convinced a federal court that the underwater detection mechanism should be limited because of potential threats to whales.
- Iraq’s economy will grow in 2008 and 2009, according to United Nations and International Monetary Fund projections.
- A passport or other proof of citizenship will be required to enter the country at the end of the month under new rules implemented by the Department of Homeland Security. At present, a driver’s license or other document suffices for entry.
- The ACLU is defending the “right” to fornicate in public restrooms.
Coming up at Heritage
To attend these or any other events at Heritage please RSVP at Heritage’s website. Or you can view these events live online. All times are Eastern.
- On Thursday, Jan. 24 at 11:00 a.m., Sen. Jeff Sessions (R-Ala.) will outline a principled immigration reform policy.
- On Friday, Jan. 25 at 11:00 a.m., Zimbabwe’s shadow justice minister, David Coltart, discusses prospects for economic recovery and political reform in Zimbabwe.
Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation.
