By John Ubaldi
Contributor, In Homeland Security
With challenges the U.S. faces abroad, one would think that all national security threats emanate overseas…but think again. America’s greatest national security threat is here at home; and it is our own nation’s economy.
Far too often political leaders from both parties pay lip service to the economic crisis here at home. Even during the Republican debate little attention was paid to the struggling U.S. economy.
On Thursday, Federal Reserve chairwoman Janet Yellen stated during the press conference why the Fed agreed to keep rate unchanged, “The significance of the first increase should not be overstated,” said Yellen. The chairwoman also remarked that the committee “judged it appropriate to wait for more evidence, including some further improvement in the labor market, to bolster its confidence that inflation will rise to 2 percent in the medium term.”
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The Federal Reserve felt that the U.S. economy is still too fragile at this time to begin raising interest rates, but may at future time, possibly in December.
Even Democratic presidential candidate Bernie Sanders issued a public statement on the move by the Federal Reserve, “It is good news that the Federal Reserve did not raise interest rates today. At a time when real unemployment is over 10 percent, we need to do everything possible to create millions of good-paying jobs and raise the wages of the American people.”
The question neither political party, the candidates for president, the U.S. Congress or even President Obama are addressing is the real threat to American security, and that continues to be the U.S. economy!
The biggest threat to the United States economy is the enormous national debt, and both parties are treating this threat as something to deal with at some future period.
Last month the Congressional Budget Office (CBO) stated in a report that over the next 10 years the budget outlook remains much the same as the CBO described earlier this year: If current laws generally remain unchanged, within a few years the deficit will begin to rise again relative to GDP, and by 2025 debt held by the public will be higher, relative to the size of the economy than it is now.
Even this month the Department of Labor reported that the unemployment rate dropped to a 7-1/2-year low with a slight increase in wage growth, but the underlying discrepancy in the report was the historically low labor participation rate, unseen since 1977.
Still, minimal response from Washington, especially when in the Labor Department’s report it showed over 94 million people out of the labor force; now this is also attributed to those retiring, but still this number is at a historically high level.
This lack of job creation is particular acute among the small business community, where according to most government statistics it accounts for over 60% of all jobs created in the U.S. Unfortunately the Brookings Institute reported in May 2014 that Business dynamism and entrepreneurship are experiencing a troubling secular decline in the United States.
This decline did not begin recently, but it accelerated after the financial collapse of 2008-09, and has continued unabated. Again, the unfortunate aspect is that neither political party, including those running for president, have articulated any coherent policy to reduce this decline.
Even the Washington Post reported back in February that new research shows our country’s rate of new business creation, which peaked about a decade ago, plunged more than 30 percent during the economic collapse and has been slow to bounce back following the recession.
What Washington fails to understand is that whenever the political establishment tries to rein in corporate America, they inadvertently curtail the growth of small business and impeded the entrepreneurial spirt of America.
Recent past polices such as Dodd-Frank Wall Street Reform and Consumer Protection Act which, was to rein the excesses of the major banks, had unintended consequences of stifling the small regional banks, where many small businesses and entrepreneurs obtain capital to grow their businesses.
The Affordable Care Act, or as it is widely known as “Obamacare”, has been a problematic cancer for the growth of small business, which in turn has curtailed hiring and economic expansion. Next year will be worse with the sharp increase in health care costs as premiums will rise substantially.
Both parties speak of comprehensive tax reforms, but always in the abstract concept of new taxes and more regulation, without thinking of the unintended consequence it has on the U.S. economy.
One wonders why the nation is infuriated with the political elite of both parties, but unfortunately, the candidates are not challenged on their public policy statement or challenged by the media who are supposed to be the unofficial fourth branch of government.
Now is time to challenge both parties as they seek the presidency in 2016!
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