Mark Tapscott: Washington is why the economy is not growing

Mark Tapscott: Washington is why the economy is not growing Washington Examiner

With unemployment still near 10 percent, and experts saying that won't change much, if at all, in 2011, it seems clear the economy is dead in the water. We need look no further than right here in the nation's capital to understand why.

On every front, the federal government is creating more investment-killing tax uncertainty, issuing endless pages of new bureaucratic regulations on the economy, and preventing firms from taking actions that could create hundreds of thousands of new positions and kick-start a muscular recovery with real legs.

Political grandstanding by President Obama and Democratic leaders of the lame-duck Congress like Sen. Chuck Schumer of New York on extending the Bush tax cuts is only the most obvious example of how Washington is why the economy is at a standstill.

The same Obama who now says he doesn't want to extend the Bush tax cuts for "the rich" said last year that "the last thing you want to do is to raise taxes in the middle of a recession because that would just suck up, take more demand out of the economy and put businesses further in a hole."

The recession is officially over, but with unemployment barely below recession levels and virtually no new jobs being created, it should be clear now is not the time to raise taxes and "put businesses further in the hole," either, whether by letting the Bush tax rates on upper incomes expire, or adopting Schumer's demagogic idea of raising taxes on "millionaires."

As the Wall Street Journal pointed out yesterday, at least 80 percent of the income received by Schumer's rich villains is from business investments, so increasing their taxes will, as Obama said, put them into deeper holes.

The Bush tax cuts are only one front in this debate. Obama is also tightening the federal bureaucracy's regulatory straightjacket on economic growth. As the Heritage Foundation reported a week before the election, the hidden tax of regulation costs at least $1.75 trillion annually. That's twice as much as the government collects in taxes on individuals.

Citing Government Accountability Office figures, Heritage said "federal agencies promulgated 43 rules during the fiscal year ending September 30, 2010, that impose significant burdens on the private sector. The total costs for these rules were estimated by the regulators themselves at some $28 billion, the highest level since at least 1981, the earliest date for which figures are available."

And contrary to the conventional wisdom, Obama's red tape explosion was preceded by a Bush administration regulatory carpet-bombing of the private sector that increased the cost of doing business by at least $70 billion.

Then there is the Obama Permitorium on energy exploration and production here in the United States, which threatens even greater long-term damage to the economy's ability to generate new jobs and growth.

After a federal judge forced Obama to drop his ill-advised moratorium on drilling in the Gulf of Mexico, the government has approved only 16 new permits for companies to start new shallow-water wells. That compares with 171 last year at a time when Obama's political appointees at the Interior Department were slow-walking every new permit request.

In every way possible, Obama and his Big Green radical environmentalist allies are making it vastly more difficult, if not completely impossible, for energy companies to harvest the vast new energy resources that have become accessible in recent years and that could free this country from OPEC.

Instead, Obama is spending billions of tax dollars to subsidize alternative energy programs that cannot possibly replace the energy produced by oil, coal or natural gas until 2030 at the earliest. In other words, Obama is strangling the economy.

Like Reagan said, "government is not the solution, government is the problem."

Mark Tapscott is editorial page editor of The Washington Examiner and proprietor of Tapscott's CopyDesk blog on washingtonexaminer.com

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