Strongly partisan government is to blame for a sluggish U.S. economy, concludes a study from The Harvard Business School.
“The U.S. political system was once the envy of many nations. Over the last two decades, however, it has become our greatest liability. Americans no longer trust their political leaders, and political polarization has increased dramatically. Americans are increasingly frustrated with the U.S. political system,” The Harvard Business School asserts in a study entitled, “Problems Unsolved and a Nation Divided,” published Thursday.
The study asserts that the key to understanding how to fix the nation’s economy is to maintain competitiveness:
U.S. competitiveness has been eroding since well before the Great Recession. America’s economic challenges are structural, not cyclical. The weak recovery reflects the erosion of competitiveness, as well as the inability to take the steps necessary to address growing U.S. weaknesses.
In other words, the U.S. government hasn’t ensured that the American economy is competitive with the rest of the world. The majority of the study’s recommendations focus on maintaining a strong tax policy. The agenda should be simplicity and efficiency, it concludes.
The high corporate tax rate and a tax on international income create burdens on the U.S. economy that shouldn’t be in place, according to the study’s authors. Additionally, personal income taxes should also be reformed to include a mandatory minimum tax amount on any income over $1 million a year.
Harvard Business School also reports that the carbon tax is essential to restoring the nation’s economy.
Not everyone surveyed in the study agreed with the authors, an unusual phenomenon the authors attributed to “partisan dialog” that “confused” the public. “Among the general public, many believe that the political system is obstructing economic progress. However, many Americans are unsure, which we attribute to the divisive and partisan dialog on the economy which has confused the public on many issues.”
The study does note that a large portion of Americans favor term limits for House and Senate politicians, and that voters are largely unsure of what those limits should be.
The struggling U.S. economy continued its slow increase in 2016, and the latest jobs numbers in August reported the entire nation only added 151,000 jobs.
