Business economists differ from House orthodoxy on regulation, uncertainty, and tax hikes
The House Republican majority has spent much of the last year, and will likely spend much of the fall, criticizing what it considers job-killing, uncertainty-generating regulations, and holding fast to the belief that deficit reduction should not include increased taxes. In contrast, the nation’s business economists overwhelmingly think the current regulatory environment is good for the economy, dismiss the possibility that government-caused uncertainty is a major factor holding the economy back, and believe deficit-reduction should include tax hikes.
These findings emerge from a survey released in August by the National Association for Business Economics. NABE’s survey of 250 of its members, who include both academic business economists and practicing business economists (“those who use economics in the workplace”), contains the following results:
— The vast majority (80%) of those surveyed believe the current regulatory environment is good for American businesses and the overall economy.
— The large majority of business economists believe concerns about economic uncertainty are a proxy for generalized concerns about the bad economy. (That is, the concerns do not reflect business worries about regulation.) Few believe economic uncertainty is a major concern that is holding back economic progress.
— Nearly nine in every 10 business economists believe that attempts to reduce the federal budget deficit should include at least some tax increases. Nearly half support deficit-reduction packages reflecting equal amounts of spending cuts and tax increases or mostly tax increases.
Here are the relevant survey questions, along with breakdown of the respondent answers which were tabulated by the NABE:
Q: In your view, is the current regulatory environment good or bad for American businesses and the overall economy?
— 80%: Good
— 17%: Bad
— 3%: Unsure
Q: When asked about their top economic concerns, many businesses cite “uncertainty” as a major worry, suggesting that continued anxiety is impacting their decision-making process. How concerned are you about “economic uncertainty,” and do you feel that it is a legitimate challenge to economic growth?
— 13%: Americans remain anxious about the economy, and as a result, they are not spending or investing in their businesses. It is a major concern.
— 75%: While Americans remain anxious, “economic uncertainty” is simply a proxy for other economic indicators. Once the economy starts to improve, such anxieties will go away. It is a concern, but not a major one.
— 12%: “Economic uncertainty” is not measurable, so it really has no bearing on the economy or growth. It is not a major concern.
Q: How should Congress attempt to reduce the federal budget deficit?
— 12%: Only with spending cuts.
— 44%: Mostly with spending cuts.
— 37%: Equally with spending cuts and tax increases.
— 6%: Mostly with tax increases.
— 1%: Only with tax increases.