There is some good news. Despite these problems, most of the underlying fundamentals of our economy remain strong. The tech revolution, which benefited from these policies, has also clearly increased the potential of our economy to grow. I think the clear answer is to pass a tax cut. And not just any tax cut, but a pro-growth tax cut.
Some tax cuts are more pro-growth than others.
A tax rate cut does encourage growth because it provides individuals with a greater incentive to save, invest and start new businesses. For example, lower tax rates might encourage a mid-level engineer with a good idea to leave his safe job and take the risk of starting a new business since he'd keep more of the rewards if his new business succeeded. It is these entrepreneurial start-ups that provide many of the new jobs and much of the incremental growth to the economy. Of course, economic growth should not be the only goal of a tax cut. Other important tax policy goals include simplicity and fairness.