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What will it take to turn our economy around?

The status of our economy is based upon the success of businesses and those who work for them.  A strong business environment supported by a government which encourages business development and expansion in some cases is needed to turn our economy around.  Businesses which have a profit provide income to pay for government functions at all levels of government.  Turning our economy around will not be easy as the path we have been on with increasing our national debt needs to be reversed.  We need an atmosphere where regulations which hurt economic development which includes jobs to be eliminated.  While some regulations are necessary others seem to have no real basis for existence given the responsibilities engrained in the Constitution.

Decisions which need to be made are hard ones as it requires rethinking our priorities in terms of where we spend the funds rolling into the government treasury.  Decisions have consequences and decisions being made by all political organizations and elected officials will see the consequences in the upcoming election.  There are many unhappy individuals who are up for

reelection and many of them may not be regretting some of the decisions they have made in the past.  The decisions to be made by this Congress involve how they respond to our current economic environment.  The impact of those decisions will have a profound effect on the future of our country for years to come.

We are a nation with many technological advantages we need only to tap that technology to better the future of our country.  The uncertainty of what taxes and regulations will be imposed creates an unknown where businesses find it hard to make plans for their future from one year to another.  The uncertainty with respect to congressional action or inaction affects decisions that businesses want and need to make.  Uncertainty will kill a business environment.  Companies today or at least many of them compete in a world economy.  Competition is fierce and in order to succeed companies need to have the environment to help them succeed.

There are a few things which would create a positive economy environment.  The decisions surrounding these

In addition taxes and regulations increase the cost of business.  Today there are so many regulations companies need a full time staff to keep within the law.  This adds costs that could be either eliminated or reduced if there were fewer regulations in place.  Some say regulations are necessary and to some extent I agree such as the safety of the work environment and the air we breathe.  Each year there are new laws which must have regulations created to identify how they will be enforced.  This causes staff to increase to some extent to enforce these regulations and in effect creates more costs for the government.  Increase in the cost of government affects us all.

Another area where governments can help business is to open up markets in other countries through trade agreements which are not restrictive in nature.  Today there are tariffs imposed by our country and others on products being imported.  These tariffs increase the price of products and make it harder for companies to compete.  Some say trade agreements are not a good thing but some of the benefits include gaining more exposure to our products to potential new customers.  Countries today are developing around the world and with this come new markets.  Each time a market opens the opportunity for sales and profits increase.  There are always going to be some negatives to trade agreements but if they are done right each country involved will see positive benefits.

We now have a world market rather than one limited by one’s country.  The products of today that businesses produce are now in demand through many countries of the world.  As countries develop they look to having new products that were missing from their choices.  To succeed businesses must have quality products and treat the customers with respect if they hope to get new ones and keep the ones they have.

Businesses today are finding that there are new competitors for their products and services in many instances.  With the tight economy we are finding that today businesses are producing more with the same amount of people they already have.  Increasing the output of employees is a good thing not a negative one except that the need for more people is lessened.  Demand must be created by developing strategies to enter new markets and many times governments can help in that respect.  Agreements such as the ones previously mentioned can be generated between countries to acquire products that are wanted in each country.  These are considered trade agreements.

One issue which seems to have a double edge sword is when companies locate divisions of their business in other countries.  While it may hurt jobs in our country it expands the profit and better secures the company for continued operation.  The same thing occurs when foreign companies create jobs in our country.  It expands their reach in our market and increases the job opportunities.  The key to this scenario is opening up opportunities for companies worldwide.  Incentives must be generated for companies to gain access to new markets and increase job opportunities.  Another issue is the reason why companies expand into other countries.  The labor costs are different.  What must occur is diffusing one of the reasons for companies expanding into foreign countries.  The key element is costs.  Reducing the costs of business to operate helps to minimize the expansion into foreign countries.  While this may not totally eliminate expansion in foreign countries it may lessen the burden of jobs being created overseas.  Costs are only one element as there are other points to be made for expanding into foreign countries.  One is the immediate availability of products to citizens of foreign countries. What companies must realize before making a decision is whether the quality of the work will be the same.  If it is not the reputation of the company will suffer and they may lose customers to other competitors.

Creating an environment for companies to succeed will not be easy but the issues presented in this article need to be addressed.  Companies must feel secure in their future and the future of the economy in which they are located.  Uncertainty creates reluctance for businesses to expand, invest and hire additional workers.  When economies are on the mend businesses will have the potential of increased sales.  Governments must send positive signals on their actions to address issues facing businesses.  Granted nothing is a sure thing but when government actions are taken businesses can predict the impact on their business.  This is the key.  Eliminate the uncertainty of government regulations and/or taxes so businesses can make decisions about their future actions and success.

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Dennis AuBuchon

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