CRL Economic Growth Taskforce

Since the fall of the Berlin Wall, most economists around the world agree that free enterprise is the key to prosperity. Socialist and industrial planning policies have bankrupted and destroyed economies, while free market economies have flourished.

HOW TO ACHIEVE SUSTANED ECONOMIC GROWTH

After studying the economies around the world, economists now generally agree that if a national government follows certain policies the national economy will grow. These policies, which fit within 5 fundamental concepts, are:

Economic Freedom

1) Freedom from high taxes: High taxes can strangle infant or struggling businesses and force larger businesses to more tax friendly environments costing jobs and the government a tax revenue base.
2) Freedom from burdensome regulation and frivolous litigation: Too much regulation and an environment of frivolous lawsuits strangle business forcing otherwise productive enterprises to close, costing jobs and additional wealth for the economy.
3) Freedom to own Private Property: In a nation where no private property exists, there is no economic freedom. You can't trade something you do not own. For free trade to occur within a country, the citizens of that country need something to trade. So it is essential that the country retain a respect for private property.

Fiscal Responsibility

4) Balanced budgets: High government deficits push the government into borrowing money, thereby reducing the amount of capital available for business to borrow. This "crowding out" reduces business' ability to start or expand and thereby reduces growth.
5) Low Government Spending: If taxes need to be kept low and budgets need to be balanced, government spending needs to be kept as low as possible. Profligate government spending will either lead to high taxes, high inflation and/or high deficits, all of which are bad for sustained economic growth.
6) Sound currency: Inflation is just another form of government taxation. By printing too much money, the government is basically paying for its spending habits by reducing the value of everyone's savings. High inflation also discourages savings and thus reduces the amount of capital available for business investments.
7) No subsidies: Government subsidies increase government spending (leading to higher taxes, higher inflation and higher deficits) in addition to increasing the cost of consumer goods in the society.

Strategic Investment

8) Investment in Education: Studies have consistently shown that a well-educated populace is necessary for sustained economic growth. Although expenses on education do increase government spending, the loss of this revenue is more than offset by the benefit to businesses in having an educated work force.
9) Investment in Infrastructure: Better highways, phone lines, sewage systems etc. all make it easier to conduct business (thereby increasing jobs and growth). Although investment in infrastructure does increase government spending, this negative effect is offset by the amount of commerce and growth facilitated by these investments.
10) Investment in Safety and Defense: Economic prosperity relies on a stable environment, free of crime and foreign threats like terrorism.

International Community

11) Free trade: Tariffs and NTBs (Non-tariff Trade Barriers) increase the cost of consumer goods in a society thereby causing inflation and reducing the amount of capital available for both savings and other productive uses. Trade restrictions also reduce the ability of nations to utilize their comparative advantages.
12) Involvement in Free trade organizations: Organizations like the WTO, NAFTA, EU, ASEAN all force member countries to open up their economies, which in turn leads to higher growth rates for the members.
13) Stable World Order: Nothing is more restrictive and destructive to free trade than continuous armed conflict. Threats to international peace must be addressed in order to create an environment where free trade and open borders can flourish.

Ethical Standards

14) Enforcement of Contracts (a strong and efficient legal system): If people cannot trust that their agreements will be enforced, confidence in business transactions is lost and the economy suffers. In addition, justice delayed is justice denied. If a nation's legal system is too slow and inefficient, or overly meddlesome, businesses will suffer, thereby slowing growth.
15) Low Corruption: In a corrupt society, all the capital is sucked up by government officials and is usually taken out of the economy overseas to offshore accounts. In addition, it is the businesses with the best connections, not the most productive and efficient, that survives in a corrupt society. Only efficient productive businesses contribute to a nation's economic growth.
16) Low Crime: A high crime rate leads to increased insurance rates, business interruption and property losses, all of which makes life difficult on businesses.

BENEFITS DERIVED FROM SUSTAINED ECONOMIC GROWTH

World policy makers have discovered that the most egregious problems befalling a country can be solved through sustained economic growth.

More Resources for Social Needs: When a country's economy grows, its tax base increases, providing more money for education, health, infrastructure, charities and other important social needs.

Healthier Environment: In developed countries, the natural environment fares better because these countries put less of a strain on the domestic natural resources. Industrializing economies are much more destructive to the economy than a service based economy like the U.S.

Stable Population: In developed countries the population either stabilizes or starts to diminish.

Democracy: When countries develop successfully they almost always turn into democracies. When a country's per capita GDP passes $9,000 they usually throw out their dictators and hold free elections. Sometimes it happens sooner. Singapore, South Korea, Chile, Indonesia, Spain and Portugal all made the change at or around $9,000. So development clearly leads to democracy.

World Peace: Economic development also leads to world peace. Developed democratic countries simply don't attack other developed democratic countries. Can you imagine Chile attacking France, or Belgium attacking Denmark, or Sweden attacking Singapore, or the United State attacking Japan? These hypotheticals would never happen because all these developed countries' economies are too intertwined. An attack would interfere with world trade and hurt the economies of both countries. Plus educated prosperous people know that there is nothing to gain from attacking another developed democratic capitalist country.

BOTTOM LINE: IT WORKS

Countries that have ignored the warnings about "controlled economies", like India, have paid the price by stagnating, staying poor, and sustaining dangerously high population growth rates. Countries that have embraced capitalism, like Japan, Taiwan, South Korea, Hong Kong and Malaysia have prospered. Most notably, Singapore, which has probably the freest economy in the world, has developed into a first world economy from a desperately poor third world nation.

There is overwhelming evidence in the world that the policies listed above work and that sustained economic growth brings unparalled benefits. Amazingly enough, many politicians either refuse to face reality or are just plain ignorant of these facts. Because of either their blindness or ignorance, or perhaps personal ambition, many push policies that are counter to increased prosperity.

In recognition of this problem, the CRL Economic Growth Taskforce has three main goals.

1) To educate and influence politicians to adopt pro-economic growth policies
2) To let the public know which candidates adopt these policies by giving out endorsements.
3) To help elect candidates that will promote these pro-economic growth policies.

Join the Economic Growth Taskforce and help encourage the right policies that will give us all a better tomorrow.