Wednesday, March 3, 2010

Would You Pass Health Care Already, Because There Is Still Much To Do.

Our Nation faces so many challenges today, it is very hard to prioritize our current issues. With that said it is obvious that the Obama administration has hitched its wagon to Health Reform.

Some believe this is essential because it lays the ground work for a long term recovery, both economically, and in terms of our country's debt issue. While others believe another course of action should have been pursued.

No matter which side of this issue you fall, It is becoming increasingly obvious that health care reform needs to either pass or fail. If you have read any of my posts, you know I believe there are 30 million reasons why the health reform bill should be ratified. But my point here is simple, we have so much that needs to be done, issues such as job creation, energy, renewing our infrastructure, and of course education reform, are major issues facing our nation and need to be addressed ASAP. Does this make you say, what have we been doing the last decade?

That really is the question isn't it? We have lost a decade of internal growth, and these issues are now beginning to pile up. Well add another issue to the list, Thomas Friedman wrote a great piece today basically warning the administration about its choices. Because when it takes over a year to even get a bill such as health reform to the Presidents desk, it is at the peril of other vitally important initiatives.

Friedman writes,

I had a chance last week to listen to Paul Otellini, the chief executive of Intel, the microchip maker and one of America’s crown jewel companies. Otellini was in Washington to talk about competitiveness at Brookings and the Aspen Institute. At a time when so much of our public policy discussion is dominated by health care and bailouts, my public service for the week is to share Mr. Otellini’s views on start-ups.

While America still has the quality work force, political stability and natural resources a company like Intel needs, said Otellini, the U.S. is badly lagging in developing the next generation of scientific talent and incentives to induce big multinationals to create lots more jobs here.

Friedman is laying out an argument that our State Governments are having weekly. How do we get business to invest in our State? Well most successful State investment stories are because of lowered tax incentives. This is something the United States as a whole is not familiar with. We have been under the assumption for sometime that we do not need to attract our own business to stay here.

Friedman continues,

“The things that are not conducive to investments here are [corporate] taxes and capital equipment credits,” he said. “A new semiconductor factory at world scale built from scratch is about $4.5 billion — in the United States. If I build that factory in almost any other country in the world, where they have significant incentive programs, I could save $1 billion,” because of all the tax breaks these governments throw in. Not surprisingly, the last factory Intel built from scratch was in China. “That comes online in October,” he said. “And it wasn’t because the labor costs are lower. Yeah, the construction costs were a little bit lower, but the cost of operating when you look at it after tax was substantially lower and you have local market access.”

These local incentives matter because smart, skilled labor is everywhere now. Intel can thrive today — not just survive, but thrive — and never hire another American. Asked if his company was being held back by weak science and math education in America’s K-12 schools, Otellini explained:

“As a citizen, I hate it. As a global employer, I have the luxury of hiring the best engineers anywhere on earth. If I can’t get them out of M.I.T., I’ll get them out of Tsing Hua” — Beijing’s M.I.T.

This leads us to the To Do list. If we are to work ourselves as a Nation down that To Do list, maybe we should be doing more to encourage investment within our borders, thus increasing our tax revenue so we can pay for the items on the To Do list.

Freidman concludes,

Does the Obama team get it? Otellini compared the Obama administration to a “diode” — an electronic device that conducts electric current in only one direction. They are very good at listening to Silicon Valley, he said, but not so good at responding.

“I’d like to see competitiveness and education take a higher role than they are today,” he said. “Right now, they’re going to try to push this health care thing over the line, and, after that, deal with the next thing. God, I’d just like this [our competitiveness] to be the next thing. Something has to pay for” everything government is doing today.

Thats the point isn't it? We have all these things that need to be done, but we have also just lost about 8 trillion dollars in wealth from the Great Recession, and our Lost Decade. I can't help but think that the next step should be about increasing tax revenue from an influx of investment. Which will be like killing two birds with one stone. Increasing employment and tax revenues.

What do you think?

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