CERTAINTY IS EASY TO ACHIEVE…. For many on the right, “economic uncertainty” is a popular buzz phrase. The private sector may be more willing to hire more workers, the argument goes, if employers weren’t burdened by the “economic uncertainty” surrounding tax rates, for example.
There already is absolute certainty about the tax cuts enacted in the early 2000s: Under existing law they expire at midnight December 31, 2010. Do nothing and we can all be absolutely certain that rates will go up. Somehow, however, that certainty is being defined as creating uncertainty.
By contrast, the changes to the existing law the business community is saying are so important to economic growth will require new legislation and, especially these days, the legislative process is about as unpredictable as you can get. So pushing for the three changes the business community says are so important to the economic recovery — keeping the current rate on upper income individuals and the existing rates on capital gains and dividends — has nothing to do with certainty and everything to do with lowering taxes compared to what they would be under current law.
The most certainty would be provided not just if there were no changes at all, but also if there were no discussion about whether there should be any changes. You can’t demand certainty and change at the same time. When you do that, the only thing that’s really certain is that certainty is not what you’re seeking.
Well said. I’d just add that this seems to have even broader applicability.
The same pitch from the same sectors argues, for example, that health care reform policies have created “economic uncertainty.” But the Affordable Care Act has largely done the opposite — making clear what kind of system will be in place in the coming years — and the uncertainty comes from Republican efforts to repeal and/or deny funding to the system. If the business community wants certainty, Tom Donohue & Co. wouldn’t be rallying to support candidates who’d push for more insecurity.
Likewise, we hear that the Obama administration’s emphasis of regulatory enforcement creates “economic uncertainty.” Again, this is backwards — we know exactly what the administration is doing to protect workers and consumers. The uncertainty comes from GOP lawmakers who’ve been pushing for a moratorium on new regulations.
This is especially true when it comes to energy/climate. Lewis Hay, CEO of NextEra Energy Resources, recently said, “There’s a lot of capital sitting on the sidelines just waiting” to see what policymakers do about regulating carbon emissions. But the easiest way to resolve the “uncertainty” is to pass legislation making it perfectly clear. Republicans refuse to allow a vote, and the business community complaining about ambiguities are siding with the GOP.
Those worried about “economic uncertainties” are the ones encouraging less clarity. The whole line of argument is kind of bizarre.
But to the larger point, if these uncertainties aren’t the reason for struggling businesses, what’s the actual problem? It’s not complicated — businesses need more customers, which will come from creating more jobs, which will come from more intervention from policymakers in Washington, which won’t happen because of opposition from the GOP and its allies.