Around the world in many industrialized countries, when a plaintiff sues a defendant, whoever loses the suit pays the legal costs of the other. This is an obvious reform that could be made to limit spurious lawsuits and Governor Rick Perry wants to implement it in the state of Texas. With plenty of GOP support, Texas is already the country’s most advanced state when it comes to tort reform. The Americans Tort Reform Association has praised Texas’ steps to fairer tort legislation saying, “Since the enactment of H.B. 4 and the subsequent passage of Proposition 12, Texas has made great strides in growing its economy and providing jobs and accessible healthcare to its citizens.” (If you want to get serious about advocating for tort reform, or you just want to get an idea about why it’s so important, be sure to check out ATRA’s website here)
As you can see in ATRA’s praise of Texas’ reforms, changes in legislation can affect the growth of economies in profound ways. A perfect example is the growth of the Swedish economy, especially when compared to the rest of Europe. After an experiment with socialism, Sweden has begun liberalizing its economy, keeping budgets balanced, and generally the kind of reforms Americans praise highly but never seem to implement. These reforms have led to robust growth, much the same way reforms in China have led to robust growth. There is a theme here, liberalization of economies leads to growth, not the other way around. In this year’s Heritage Foundation rankings of economic freedom, Sweden became more free, and the U.S. less. The summary of the reasons why the U.S. fell in the rankings is predictable, though still disheartening:
Uncertainties caused by ongoing regulatory changes and politically influenced stimulus spending have discouraged entrepreneurship and job creation, slowing recovery. Leadership in free trade has been undercut by “Buy American” provisions in stimulus legislation and failure to pursue previously agreed free trade agreements with Panama, Colombia, and South Korea. Tax rates are increasingly uncompetitive, and massive stimulus spending is creating unprecedented deficits. Bailouts of financial and automotive firms have generated concerns about property rights.
The praise for Sweden is refreshing for a formerly socialist state:
With its economy open to global trade and investment, Sweden scores well in trade freedom, investment freedom, monetary freedom, and financial freedom. The overall regulatory and legal environment, transparent and efficient, encourages robust entrepreneurial activity. Banking is guided by sensible regulations and prudent lending practices. Monetary stability is well maintained, with inflationary pressures under control. The judicial system, independent and free of corruption, provides strong protection of property rights.
Reform is necessary in the United States where lawyers and corporate accounting lobbies have hijacked the taxation process. America is unfortunately led by a vast army of lawyers in the House and Senate, and immense pressure will need to be placed on them in order for them to fulfill any promises of reform. The current compromise agreed to by GOP leaders and the president will get the country through next year, but starting as soon as the new Congress enters the Capitol, a push for major tax reform must begin. I have suggested a series of measures to make the U.S. the most competitive destination for business in the world, the first of which would be to have the lowest and simplest corporate tax rate scheme in the industrialized world. Another vital reform is a complete end to the death tax. For all the firepower you could need regarding the death tax, check out this website run by the American Family Business Institute. The death (estate) tax is not only immoral, but has been found to be a revenue loser by the Tax Foundation’s J.D. Foster, take a look here. The government is paying to punish families!
It’s obvious that some more new blood is needed to implement the reforms that are necessary to push the U.S. forward in the world. Aside from limiting the number of lawyers in the Senate and Congress, new blood should be leading the RNC, which has missed the boat entirely in regards to the Tea Party and the outrage Americans are feeling toward their big government. Michael Steele, whom I had high hopes for upon entering the position of chairman at the RNC, has failed miserably. He has announced that he is running for the post again, but committee members should look elsewhere. America needs focused leaders who will put the country first, Michael Steele simply hasn’t shown Americans that he can do that.