4 Ways To Overcome The Worst GDP Decline In Five Years --Requires a new prez, of course

By E21 / Manhattan Institute, Jun. 25, 2014, Economics21.org

U.S. GDP fell by 2.9 percent in the first quarter of 2014, according to the Commerce Department'sthird and final estimate. This follows a fourth quarter GDP growth rate of 2.6 percent, slightly above the average over the past three years.

The U.S. economy shrank for the first time since the first quarter of 2011. It was the biggest drop since the first quarter of 2009. Exports declined by 8.9 percent and gross private investment dropped by 11.7 percent. The decrease would have been even larger if federal non-defense government spending had not increased by 5.9 percent.

America can take five common-sense steps to increase economic growth.

Develop energy resources. Since 2008, U.S. oil production has grown nearly 50 percent. This is small compared to the over 400 percent increase in shale gas production from 2007 to 2012 (latest data available).

Yet federal acres leased for oil and gas exploration have decreased by 24 percent over the last 5 years. In 2013, the federal government leased 36 million federal acres compared to 131 million acres in 1984. America should take full advantage of its resources and open up more federal lands for energy exploration, charging royalties that would bring in a stream of revenue to Uncle Sam.

Employment in the oil and gas sectors has increased 40 percent since 2007. Eleven million Americans now work directly and indirectly in the oil and gas industry. Additional permits on federal lands could result in an additional 3 million to 4 million additional jobs from increased U.S. hydrocarbon production, according to Manhattan Institute senior fellow Mark Mills.

Implement regulatory reform. Nearly 90,000 new final regulations have been promulgated over the past 20 years, for an average of more than 4,300 each year. The overall negative economic effect of these regulations is $1.9 trillion annually, or 9 percent of GDP, according to estimates by the Wayne Crews of the Competitive Enterprise Institute.

Small businesses and start-up companies are disproportionally harmed by regulations because they cannot afford in-house legal departments. America is discouraging entrepreneurs and start-ups, major contributors to innovation and productivity gains.

In the first quarter of 2014, productivity, measured as output per hour worked, declined at an annual rate of 1.7 percent. After growing at an average of around 2.5 percent per year since 1948, productivity growth has averaged only about 1.1 percent since 2011.

The United States needs to grow itself out of its economic problems, and senseless regulations discourage investment and make growth more difficult.

Eliminate corporate taxes. The United States has the highest corporate tax rate in the developed world. As calculated by the Tax Foundation, America's 35.3 percent effective tax rate on business is more than 6 points higher than the world average. Reforming the corporate tax rate to meet or better the world average is a solid start, but complete elimination of the corporate tax would offer the best results for economic growth. One studyby Boston University professor Laurence Kotlikoff estimated that real wages of American workers would grow by 12 percent if the corporate income tax was abolished.

Despite all the economic damage done by the corporate tax, its benefits are minimal. Less than ten percent of federal tax revenue came from the corporate income tax in 2013, an amount that could be offset by higher economic growth.

Enact comprehensive immigration reform…

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