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Morning Bell: Let's Be Honest About Outsourcing
Posted By Amy Payne On July 19, 2012 @ 9:14 am In Economics | Comments Disabled
Both candidates in the presidential race have been accusing the other of “outsourcing.” It’s one of those words that is loaded with negative meaning, implying that the perpetrator is un-American. But does America have an outsourcing problem?
What is popularly referred to as “outsourcing” is the practice of offshoring business functions, including building facilities and employing workers in other countries. Liberals often argue that “sending jobs overseas” is harming America’s economy.
They are missing two important truths: The reality of jobs in America, and the ways to bring even more jobs to the home front.
Jobs in America
How to Boost American Jobs Even More
With an 8.2 percent unemployment rate, America still needs more jobs. There are many steps policymakers could take that would make locating—or relocating—in the U.S. more attractive to businesses.
A quick look at the Index of Economic Freedom, produced by The Heritage Foundation and The Wall Street Journal, reveals America’s competitive disadvantages.
Hong Kong , ranked No. 1 in the Index, has an economy that has been growing at 7 percent. That’s astounding. In contrast, U.S. GDP growth in the first quarter of 2012 was a paltry 1.9 percent.
There are several reasons why Hong Kong is No. 1 and America  is No. 10. Hong Kong’s top corporate tax rate is only 16.5 percent, compared to the U.S. rate of 35 percent. Hong Kong’s trade regime is one of the world’s most competitive and efficient, with a zero tariff rate. And its regulatory environment is “highly supportive of business efficiency.”
Meanwhile, in the U.S., runaway regulations  growing by the day make doing business vastly more expensive and difficult. The government is holding back the economy through regulation and its nonstop deficit spending, as Heritage’s Bryan Riley explains :
Excessive federal spending and the resulting budget deficit continue to be a problem. Foreign investors spent more than $400 billion on U.S. Treasury securities in 2011. This is another way to say that the government borrowed more than $400 billion from foreign investors. Those dollars could have been invested otherwise in the private sector of the U.S. economy or spent on U.S. exports.
While concern about outsourcing is misplaced, there are many ways the U.S. could attract even more jobs than it already does. Increasing our own economic freedom would spur growth in the economy, bringing greater prosperity and new enterprises to our shores.
Article printed from The Foundry: Conservative Policy News Blog from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2012/07/19/morning-bell-lets-be-honest-about-outsourcing/
URLs in this post:
 leads the world in manufacturing: http://www.nam.org/Statistics-And-Data/Facts-About-Manufacturing/Landing.aspx
 adding 300 new jobs: http://content.usatoday.com/communities/driveon/post/2012/01/bmw-adding-300-jobs-to-plant-in-south-carolina/1#.UAfrw5FnWRo
 employ 1,000: http://travel.usatoday.com/flights/story/2012-07-02/Officials-Alabama-Airbus-plant-will-employ-1000/55978050/1
 right-to-work states: http://www.nrtw.org/rtws.htm
 more than twice as many people: http://blog.heritage.org/2011/04/13/when-trade-is-free-the-u-s-gains-investment-and-jobs/
 giant sucking sound: http://www.youtube.com/watch?v=Rkgx1C_S6ls
 local suppliers and small businesses: http://www.ofii.org/resources/insourcing-facts.html
 Hong Kong: http://www.heritage.org/index/country/hongkong
 America: http://www.heritage.org/index/country/unitedstates
 runaway regulations: http://www.heritage.org/research/reports/2012/03/red-tape-rising-obama-era-regulation-at-the-three-year-mark
 explains: http://blog.heritage.org/2012/06/27/new-report-shows-outsourcing-fears-are-misplaced/
 Image: http://www.morningbell.org
 new video exposé: http://www.breitbart.com/Big-Government/2012/07/18/union-bosses-help-get-tax-money-for-digging-and-filling-ditches
 default: http://online.wsj.com/article/SB10000872396390444097904577535322022316422.html?mod=WSJ_hppMIDDLENexttoWhatsNewsSecond
 approved flight training for 25 illegal aliens: http://cnsnews.com/news/article/tsa-let-25-illegal-aliens-attend-flight-school-owned-illegal-alien
 immigrant father building a business: http://www.chicagotribune.com/news/columnists/ct-met-kass-0718-20120718,0,2313230.column
 Read more: http://blog.heritage.org/2012/07/18/ernst-and-young-obamas-tax-increase-would-kill-710000-jobs/
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