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Kick It Up A Notch, Tim. Shoot for 8 Percent.

Jimmie | June 7, 2011 | Comments (0)

I’m pretty sure Tim Pawlenty won’t shake the “boring” label if he continues to define “big” in such small terms.

Tim Pawlenty wants the U.S. to aim for an accelerated economic growth rate. In a speech to be delivered at the University of Chicago this morning, Pawlenty will outline the policies that he thinks can reinvigorate the country’s sputtering economy.

“Let’s start with a big, positive goal,” Pawlenty will say, according to excerpts of the speech released by Team Pawlenty this morning. “Let’s grow the economy by five percent, instead of the anemic two percent envisioned currently.”

Sure, 5 percent economic growth seems big right now, when we’re mightily struggling to get to 3, but it’s nowhere close to what this economy could be doing. Consider two points: 1) the economy grew almost as 5 percent throughout the latter part of the 1990s and we weren’t trying to grow ourselves out of an extended recession, and 2) private industry is trembling like a cocked bowstring right now just waiting for the government to let go of it so it can take off.

On that second point, let me say I don’t have any hard numbers to back it up. I do have a series of observations not only about the national economy but about businesses around me. Employers want to hire. They want to expand their businesses. Private investors want to pour money into the economy right now. They won’t, because of several factors that all involve intrusive, uncertain, and barely-competent government. A blizzard of regulations, taxes, and fees prevent individual entrepreneurs from jumping in. Uncertainty about taxes, the deficit, and the value of our dollar prevent small businesses from hiring full-time employees. I believe we have a high level of potential economic energy that can become kinetic economic energy (and how’s that for a mangled metaphor?) if we can release the government pressure holding it back.

We can release a lot of that pent-up energy fairly quickly and Pawlenty’s ideas would be fairly simple and very effective. We do need a simpler, lower tax code that is less prone to corrupt tampering and that will last for more than a couple years. Our corporate tax rate needs to come down to at least match the rates of other countries with which we much compete globally. We must stop punishing the results of hard work with ridiculous capital gains and death taxes. We have to allow people to build individual economic legacies they can pass on to their children and grandchildren. All of these things will send tax money — in smaller percentages to be sure, but also in much greater amounts because that’s just how things work — to our states and to Washington.

We know there’s only so large a chunk our Federal government will get of what we produce. Any attempt to take more than that always leads us to a more meager living for each of us. It makes so much more sense to grow the economy as much as we possibly can, as fast as we possibly can, for as long as we possibly can so that we can fund the public projects we really need without having to borrow tens of trillions of dollars from the generations that come after us. With that in mind, I think Tim Pawlenty’s goal of 5 percent growth isn’t all that ambitious. I want America to shoot for more.

Here’s the goal I’d suggest: 8 percent growth every year for 3 years. Yep, it’s ambitious. No, we haven’t hit 8 percent in a long time, not even in the Reagan boom year of 1984. Yep, it would take a lot of work not just from our elected officials (who, quite honestly, could do with a year or two of real work) but from all of us. It’s not impossible, though. Heck, it’s not even particularly outrageous and I don’t see any reason why we can’t utterly destroy this recession in three years. I’d suggest that the President who sets a goal as ambitious and visionary as that will walk over the competition in 2012.

UPDATE: James Pethokoukis has a few comments about Pawlenty’s speech along with a few more details. He’s not on board with my goal but more because it’s something we’ve never done before rather than any sense that we can’t, I think.