CEOs continue to press on the need for deficit reduction. Dave Cote, Chairman and CEO of Honeywell International, Inc., and BRT vice chairman, was on Jim Cramer's "Mad Money" program on CNBC Thursday (video), and he closed with cautionary remarks about the effect of government debt on the economy.
The nine-minute interview covered a range of issues including Honeywell's prospects -- good! -- energy policy and regulation, with Cramer asking at the end whether Cote was optimistic or pessimistic about the economy in 2012. Cote, who also chairs BRT's Energy and Environment Committee, responded:
I’m kind of playing this one down the middle of the road. And my concern is that right now the guys who are holding all the cards to whether we have a greater economy is government in Europe, and government in the U.S. And the same guys who talk about the need for jobs, we’ve got to have jobs, and that’s the problem, no jobs – in both regions, the biggest hold-up is government and their approach to debt. And if they would just get out of the way and fix the debt issues in both places, they could be amazed in what kind of global recovery we’d have.
Cote was a private-sector member of the Simpson-Bowles Commission, i.e., the National Commission on Fiscal Responsibility and Reform. He is also a leading advocate of a broad "American competitiveness agenda," which he outlined in a November speech at the Tax Foundation. The agenda's pillar are debt and tax reform, a comprehensive energy policy, improved math and science education, infrastructure investment, free trade and tort reform. As befitting the audience, he concentrated on the critical need for tax reform, to wit:
So…what to do? It starts with some fundamentals of what we want the income tax system to do. First…We need to decide what we want Government to do and how much of it. That should generate some intense political dialog. We all know Government is not the most efficient user of funds…but at the same time there are things we need that only Government can do. Second…based on current discussions we need to find the best way to extract 20‐21% of GDP in taxes in the least intrusive and least noxious way possible. It needs to be the mosquito extracting blood from the host…irritating but very survivable. And not the vampire, killing the host in the process. Given the essence of political compromise, we’ll probably end up with a vampire mosquito…as long as the host can still prosper. Third…we should construct the system that creates the least market distortion possible. And almost all deductions and credits create distortion. Fourth…in the process, it needs to be recognized by politicians that Government is not just a regulator of business. Government is also an enabler of business. Regulation is important to set minimum standards and enabling is important to foster that dynamism essential to a growing economy that creates the jobs we all want. Tax policy can be an enabler.
The Tax Foundation honored Cote that evening with its Distinguished Service Award.
Motion to proceed to consideration of S. 744, #immigration bill, passes Senate by 84-15. Getting right into amendments.
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