At first glance, apart from both being based in Georgia, UPS and Watson and Knox Inc. couldn’t have two more different lines of business. One is a global logistics leader with thousands of employees. The other is a local real estate agency with a few dozen employees. But right now, we’re both having a tough time planning for the future.
It doesn’t matter if you’re UPS or Watson and Knox – if you’re a company in the U.S., you’re struggling to make the most of a murky economic situation. Without political and economic stability, it’s a challenge to plan for tomorrow, let alone a decade from now.
Getting back on track shouldn’t be so hard. But as we’ve seen in the painful government shutdown and debt ceiling standoff, our political leaders are stuck in govern-by-crisis mode. Instead of looking at long-term solutions, we’re playing politics. That’s unacceptable.
Stemming the tide of debt and bringing about a new wave of economic expansion should be a top national priority. Our elected representatives must understand that this long-term growth objective is more vital than any short-term political gain. To fix the debt and stimulate growth, members of Congress and the Obama Administration should work in a comprehensive, bipartisan way to enact much needed budget and tax reforms.
It should be alarming to you that our debt is a greater percentage of our economy than any time since the Second World War. And while our near-term deficit outlook has improved by a small margin, the long-term projections still show a growing debt over the years and decades to come. Debt burdens as large as ours have been associated with higher interest rates, higher inflation rates and an even slower-growing economy. None of this is good for business.
Similarly bad for business is our nation’s outdated, inefficient tax code. And though small companies and large corporations face different tax codes and have varying views about how best to reform them, we can certainly agree on the goal – a code that is simpler, fairer, broadens the base, lowers rates and increases international competitiveness.
Growth-promoting tax reform must be part of a long-term deficit-reduction plan. But for reasons of both political viability and simple arithmetic, tax reform alone won’t be able to stabilize our teetering debt over the years to come. As such, tax reform must be paired with adjustments to our entitlement programs in order to increase efficiency and stave off insolvency. A comprehensive package that has all of these elements — and is implemented gradually enough to allow everyone to adjust and for the economic recovery to take hold in earnest — will instill the confidence in businesses large and small, as well as in their consumers, to start truly driving our economy forward.
Simply put, stabilizing and bringing down the debt and addressing tax reform is good for businesses large and small. If we fix the debt, we’ll provide more stable interest rates and inflation rates over the long-term; open room in the budget for important investments like education and infrastructure; and, perhaps most importantly, greatly reduce the threat of a debt-induced fiscal crisis.
