Get rid of the government hammer

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(Host) Commentator John McClaughry agrees that Vermont needs a jobs initiative, but he doesn’t think the “jobs bill” is it.

(McClaughry) There is an old saying that if the only solution you have is a hammer, every problem looks like a nail. That aptly describes the current legislative push for a jobs bill. The much-heralded bill to stimulate job creation is backed by Governor Jim Douglas and a majority of both parties in the Senate.

The bill would authorize the Vermont Economic Development Authority to invest an additional million dollars in small business lending entities and another $2 million into a new investment partnership. The Vermont Jobs Fund would advance $15 million more for expanded farm loans, and $3 million in loans to another state-funded small business development corporation. The Vermont Economic Progress Council would have more authority to distribute millions of dollars in tax credits to worthy enterprises.

Now step back and look at all this stuff. It’s all just more government. The only solution conceivable to the backers of this sort of bill is yet more government programs, where government functionaries distribute taxpayer-financed benefits to worthy applicants who do all the right things. That’s the hammer.

But any reasonably successful business person will ruefully tell you that the problem in Vermont is not too few government loan and selective tax credit programs. The problem is that Vermont’s economic development climate is weak because of too much government, not too little.

Compare Vermont’s model with New Hampshire’s. Vermont has high tax rates, a mind- boggling permit process, a host of mandates on business, and a legislature where both Republicans and Democrats view the present jobs bill as the solution to the problem of not enough jobs. The New Hampshire model features no personal income tax, a comparatively benign permit process, few business mandates, and a legislature that believes that with Big Government off their backs, entrepreneurial men and women will go forth, invest, hire, produce, market, and flourish, making New Hampshire more prosperous.

Vermont’s political leaders look with horror at New Hampshire’s economic freedom. What if somebody started a business that wasn’t located where it should be, or didn’t pay enough to the right people, or didn’t offer a full array of benefits, or didn’t check for arrowheads, or just acted without getting anybody’s approval? Horrors!

No, we must maintain our costly barriers to economic progress, mandate numerous nice things that all businesses must do, expand government programs to shower other peoples tax dollars on the favored few, require elaborate reporting to make sure all promises are kept, and above all Maintain Control to make sure all economic activity conforms to our approved image of the Perfect Little State.

The jobs bill is not a solution to the shortage of good jobs. It is an assurance of bureaucrat-heavy big government stagnation. Start tax rates trending downward. Unsnarl the permit tangle. Stop laying mandates on business. Expand opportunity. Give freedom a chance. Then enterprising Vermonters can give New Hampshire a real run for the money.

This is John McClaughry thanks for listening.

John McClaughry is president of the Ethan Allen Institute, a Vermont policy research and education organization.

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