The Surprising Moral Case For Free Enterprise

Free Enterprise is based on those needing jobs, goods, or services freely contracting with others to purchase those items or services at a mutually agreeable price. It is a win – win situation for both parties. Not so when the government gets involved and burdens some participants with arduous regulations dictating which products or services must be utilized, and/or placing taxes or minimum wage regulations into the mix.

A good video summary of Arthur Brooks’ book, The Road to Freedom, with five two-minute segments.

Policies based on the Moral Case for Freedom:

Tax Reform:

In 2011 46% of households had zero or negative federal income tax liability.

In 2010, 60% of families received more from the government than they paid in taxes.

Individual and corporate tax compliance costs $163 billion, more than $500 per person.

The U.S. top combined corporate tax rate is the highest in the industrialized world.

“Tax reform is a great opportunity to make a fairer system that will encourage economic growth and unleash the creative power of the American people. ”— Chad Hill, AEI

Entitlements:

Most seniors have withdrawn more from Social Security and Medicare than they paid in.

The Medicare hospital care fund has been running a deficit since 2008.

Social Security will be insolvent in 2036.

The U.S. currently spends 9.9% of its GDP on entitlements.

The Social Security system still leaves almost 10% of seniors in poverty.

“People need a hand up, not a hand out. All policy direction should be to empower individuals to run their own lives.”— Rupert Murdoch, founder, chairman and CEO, News Corporation

Job Creation

We are experiencing the longest high-unemployment streak since the Great Depression.

The real unemployment rate is 10.4% when discouraged workers are counted.

18% of young Americans said they delayed marriage due to job worries or unemployment, and 23% delayed starting a family.

“We can spark an economic recovery by unleashing the job-creating power of business, especially small entrepreneurial businesses, which fuel economic and job growth quickly and efficiently.”— Charles Schwab, founder and chairman, Charles Schwab Corporation

Economic Growth

While average economic growth from 1950-2000 was 3.6%, from 2000 to 2010, economic growth fell to 1.7%.

To lower our deficit to 5% of GDP, we need to achieve a year-on-year 4% growth rate.

Every 1% of additional growth today will double real incomes 72 years from now.

“I grew up with great values and tremendous opportunities … I want my three kids and other’s people’s children to have the same opportunities that I had.”— Joe Ricketts, founder and former CEO, TD Ameritrade

National Debt

U.S. debt is 100% of annual GDP, which most economists characterize as an unsustainable level.

In 2011, the U.S. borrowed about $4,152 for every person in America, totaling $1.3 trillion.

Servicing the national debt will cost $1 trillion per year by 2023 under current policy.

Closing the spending gap through increased revenues over 25 years would require a 56% tax hike.

“For far too long, short-sighted politicians have paid for today’s promises with tomorrow’s prosperity. If Congress doesn’t take serious action to reign in federal spending, our generation will be heirs to a legacy of higher taxes, more debt, and fewer opportunities.”— Fara Klein, Brown University

Here is Arthur Brooks’ video on the Surprising Case for the Morality of Free Markets.