5 Things That Must Happen in 2010 To Spur American Entrepreneurship: The Year of Engagement

Although encouraged by President Obama’s pledge during the State of the Union Address to double exports and open up new markets, we are not seeing any progress toward meeting these critical objectives. I wish he was being sidetracked by job creation –but that is not the case either.  Once again the Obama administration has failed to understand that the key to stabilizing the economy and job creation rests with supporting the nation’s entrepreneurs, especially small business exporters.  As a public service, let me humbly suggest that there are five initiatives that must be considered in 2010 to move this country forward.

1) Pass the three pending Free Trade Agreements

Did you know that for every dollar invested in exports by small and mid-size companies  through export finance specialists, the results is $500 in export sales?  The Department of Commerce puts the figure at $415 in export sales for every dollar invested.  So think what opportunities are being missed by not passing three major free trade agreements:

In Colombia, U.S. exporters have paid $1.3 billion in tariffs that could have been eliminated if the U.S. – Colombian Free Trade Agreement had been voted on by Congress.  Ambassador Schwab noted that since more than 90 percent of Colombian products coming into the U.S. are duty free, U.S. exporters should enjoy a reciprocal agreement with Colombia. Ironically, Colombia supports the agreement and is willing to eliminate most tariffs.

South Korea
U.S. citrus exporters have paid $250 million in tariffs that could have been eliminated had Congress voted on the U.S.-Korea Free Trade Agreement (KORUS-FTA).

The commercial potential of this agreement for the United States is significant. US companies already export nearly $3 billion annually in merchandise to Panama – and at $2.3 billion, the US merchandise trade surplus with Panama is our fifth largest in the world.

2) Defeat the Cap and Trade Bill

Everybody agrees that the world needs to reduce pollution.  The trouble is that the world cannot agree on how to do it.  A perfect example is the ill-conceived (and slowly dying) Carbon Cap and Trade legislation, which has the government setting a “cap” on the total amount of carbon that can be emitted nationally; companies then buy or sell permits to emit CO2. The cap can be reduced over time to reduce total carbon emissions.

It sounds plausible, but as the cap is tightened and companies are stripped of initial opportunities to “offset” their emissions, the price of the carbon emission permits will skyrocket beyond the current estimate of $28 per ton of carbon. The end result is that the corporate costs of buying these expensive permits will be passed to consumers.  Worse, small businesses will not be able to afford their energy expenses, delaying job creation.  This legislation must not move forward if we want to create jobs in 2010.

3) Incentivize Small Business With Tax Breaks
The current solution to every problem is for the U.S. government to tax our corporations until they flee our shores and tax the rich until they are rich no more. This has left the U.S. as the most over-taxed nation on earth.  Just consider the following:

Nearly half of our states when combining federal and state income taxes already lead the world in the highest corporate tax rates of any industrialized country.  If Iowa, Pennsylvania and Minnesota were countries they would be the top three highest taxed in the world. Massachusetts, Alaska and New Jersey would be four, five and six.

Twenty-four U.S. states have a combined corporate tax rate higher than top ranked Japan. Thirty-two U.S. states have a combined corporate tax rate higher than third ranked Germany. Forty-Six U.S. states have a combined corporate tax rate higher than fourth ranked Canada. All fifty U.S. states have a combined corporate tax rate higher than fifth-ranked France.

Higher taxes are obviously not the answer, because they will only propel jobs and wealth away from America. It does not matter if our taxes were quadrupled; there is not enough money in America to bring redemption to any of these seemingly incurable problems.  We must stop over-taxing small business, the leading source of job creation.

4) Leave NAFTA Alone

The North American Free Trade Agreement (NAFTA) is by far the most beneficial piece of trade legislation Congress has ever passed. At a time of economic upheaval where job creation must be at the heart of our recovery, it is mind-boggling that Congress could contemplate changing or even opting out of the agreement. As supporters of fair market access for American exporters, it is our obligation to push Congress to maintain NAFTA with its current provisions. Since NAFTA was implemented, the U.S. added 30 million new jobs.

Consider that during 2008, the U.S. exported $200 billion to Canada (up 11 percent over 2007) and $115 billion to Mexico (up 13 percent). In fact, 30 percent of all U.S. trade goes to NAFTA partners.

Further, most Americans do not appreciate that today, Canada is America’s biggest trade partner, and it is where the U.S. gets most of its crude oil. It does NOT come from the Middle East.

Consider that Mexico imports more U.S. products than China and Japan combined, and that Mexico is neck-and-neck with Saudi Arabia when it comes to energy exports to the U.S.

NAFTA creates American jobs, so it must not be renegotiated or altered.

5) Restore Faith in Free Enterprise

It’s time to restore America’s belief that this country’s best times are still ahead and that there is a role for everyone.  No nation on Earth can out-think and out-work the American worker.  What is missing is a sense that there is a chorus of like-minded Americans who are looking for answers and the empowerment to make their voices heard.

Entrepreneurs must be given the resources and incentives they require to profitably create new enterprises.   That means tax breaks, opening up new foreign markets, providing greater access to working capital, and supporting programs that restore America’s competitive advantage throughout the world.

This erosion in spirit has been building, and ca not pinned on a single administration, but the time to reverse the trend is NOW.  Americans have a “Conscientious Equity” in the future of this country and along with it, an inherent responsibility to play an active role in shaping how this country sustains free enterprise and economic growth.

Part of this responsibility is making our government representatives accountable for their performance.  Staying loyal to a political party to curry favor with party leaders while ignoring the consequences of ill-advised programs and bills impacting constituents perverts the reason they were elected as our representatives.  The welfare of the nation should be the overriding priority, and those who fail to recognize their responsibility do so at their own political peril.   Our conscientious equity demands that we pay attention to the issues that affect this nation. Feigning ignorance shirks your responsibility as a citizen, and ignoring it constitutes a failure of moral character.

Let’s make 2010 the “Year of Engagement” – when Americans unite to support small business and restore the economy and American jobs.

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