Uneven economy cause for concern

Editorial by Jacksonville Daily News, July 22, 2013.

The U.S. economy appeared to be doing well. A few months ago, it seemed that perhaps a true economic recovery was coming in 2013 or 2014. Then it became apparent that the economy was wobbling once again, despite huge gains in the stock market.

Recent reports show sluggishness in inventory accumulation and retail sales. This means that the economy likely grew in the last quarter by less than 2 percent. That would make the third quarter in a row the gross domestic product grew by less than 2 percent.

The American people have seen — and paid for — a variety of fixes for the economy, from the Federal Reserve System pumping money into the banking system to the $860 billion stimulus program of 2009.

Congress and the White House have also spent hundreds of billions of dollars on social welfare programs, unemployment payments and jobs programs. But all these efforts have failed to give the economy a major boost.

The long, slow recovery has gone on for four years. This so-called recovery strikes many as just slightly less painful than the Great Recession, which lasted from December 2007 to mid-2009.

The recovery has been marked by skittish consumers, nervous employers and high unemployment.

The caution that consumers and employers have is still evident. The Washington Post reports that in June, “so-called core retail sales” — excluding car and gasoline sales — rose just 0.15 percent over May sales.

Further, the national unemployment rate was 7.6 percent in June. That’s the lowest of President Barack Obama’s tenure in the White House. But unemployment has been over 7.5 percent for all of the months that Obama has held office.

Obama-care is also slowing hiring, causing employers not just to hesitate in hiring full-time workers, but to also cut the hours of part-time workers to avoid paying health benefits.

President Obama and his advisors have pointed to one factor that weighs heavily on the private sector: high corporate tax rates. The U.S. has the highest corporate tax rate in the industrialized world.

Obama’s own commission on spending and debt, the so-called Bowles-Simpson commission, recommended that the corporate tax rate on business income be reduced to 26 percent. The current rate is 35 percent and jumps to 39.2 percent when state taxes are factored in. Congress has done little to follow through on the recommendation.

The U.S. economy is still struggling, and minor measures and government spending are not enough to fix it.

The president and Congress need to take a clue from North Carolina’s legislators and get serious about reducing the corporate tax rate and overhauling the complex and burdensome tax code. This could help the private sector finally get moving again