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USA Drops In Global Competitiveness

By David King Published: September 5, 2012

But first, my summary of Day One of the Democratic Natonal Convention - "Abortion, Abortion, Abortion !!! Gay Rights !!! Minorities !!! War On Women, War On Women !!! Spend, Spend, Spend !!! Tax The Rich !!! We're All Victims !!!"

This concludes my coverage of the Democratic National Convention.

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The USA is the world's largest economy. That alone makes us a powerhouse. But we are slipping in the ranks of global competitiveness, according to the World Economic Forum (WEF):

"The world's largest economy, which was placed 5th last year, fell two positions to the 7th spot - marking its fourth year of decline.

A lack of macroeconomic stability, the business community’s continued mistrust of the government and concerns over its fiscal health were some of the reasons for the downgrade, according to the annual survey."

How diplomatic of the WEF not to merely cite 'Barack Obama' as the culprit behind this year's slip in competitiveness. Obama, America's all-time debt-accumulator and macroeconomic destabilizer, is the #1 reason the business community doesn't trust the government, and why should they ? President YouDidn'tBuildThat rails against the wealthy, saddles business with additional burdens, often paints the business sector as the enemy, tries to redistribute wealth from earners to non-earners, and tries to select which businesses will be allowed to succeed or fail, etc. Business has every reason to mistrust Obama. Electing Romney will change things.

The WEF continues:

"Political deadlock over reducing the unsustainable federal government budget deficit – projected to hit $1.1 trillion this year – prompted Standard & Poor’s to downgrade the country’s credit rating by one notch to AA+ from AAA last August.

  A mix of U.S. tax hikes and spending cuts – referred to as the "fiscal cliff" - are set to come into force in January unless lawmakers reach a compromise for avoiding them."

It's essential to remember who has done what regarding our political gridlock on fiscal issues.

The Obamanauts have tried to paint the Republicans as the obstructionists, but it was the Republican-led House that passed the Ryan plan to deal with our macroeconomic stability issues, and the Republican House also passed a balanced budget amendment. The Democrat-led Senate shot down both those plans. 

Obama, on the other hand, has proposed taxing the rich, which would solve...exactly nothing, barely making a dent in our $1.2 trillion deficit. Senate Democrats haven't even passed a budget in over three years, much less come up with a plan for macroeconomic stability. Obama also ignored his own Simpson-Bowles commission proposals.

We don't have political gridlock at all. We have one side (R) proposing solutions, and the other side (D) sitting on their butts crying about the solutions proposed by R. That's not political gridlock. It's political cowardice from the D's.

But I'm sick of talking about political cowards. They deserve no respect, and they won't get any from me.

What interested me about the WEF global competitiveness survey was the country ranked #1. Switzerland was named the most globally competitive economy. What can we learn from Switzerland that could be of use here in America ? What policies does Switzerland embrace ? I did a little checking:

"Well-secured property rights, including for intellectual property, promote entrepreneurship and productivity growth. A tradition of minimum tolerance for corruption has been well institutionalized in an efficient legal framework, strongly sustaining the rule of law. The judicial system, independent of political influence, ensures effective and transparent enforcement of commercial contracts.

Switzerland’s openness to foreign trade and investment continues to provide real stimulus for a dynamic and resilient economy. A sound regulatory environment and minimal barriers to trade have contributed to its status as one of the world’s most competitive and innovative economies. Macroeconomic stability and a highly developed and competitive financial sector reinforce Switzerland’s position as a global financial hub. The financial sector has recovered swiftly from the global financial crisis and has withstood a weakening of bank secrecy laws."

Switzerland embracess free trade and investment. It is a global power in the financial sector, It is one of the freest economies in the world. Switzerland's public debt is 52.4% of GDP, half that of America's. Switzerland's government is smaller than ours. Government spending is 33% of GDP, compared to our 45% of GDP. Switzerland also decentralizes government power more than we do. The highest federal tax rate in Switzerland is 11.5%. The federal corporate tax rate is 8.5%.

Switzerland is business friendly, ranking high in business freedom, labor freedom, and monetary freedom.

As for regulations:

"The competitive regulatory framework strongly supports commercial activity, allowing efficient and dynamic business formation and operation. Bankruptcy proceedings are relatively easy, although the overall pace of improving business efficiency has slowed somewhat in comparison to other economies. Labor regulations are relatively flexible, and provisions concerning work hours have been eased. Monetary stability is solid."

Given all this, it comes as no surprise that Switzerland's unemployment rate is 4.5%, and it's current rate of inflation is 0.7%.

It sounds like Switzerland is doing pretty much what the Republicans in America are suggesting for our economy. We could have results similar to Switzerland's here, and we could even have something much more powerful, given our enormous economic potential.

But first we have to convince the left-wingers, the liberals, and the Democrats, who have their heads stuck in economic quicksand.

 

 

 

 

 

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