Market forces are creating the perfect conditions for major FDI (Foreign Direct Investment) to flow to the US. Investors and corporates can tolerate a longer payback period on their investments provided they have stable financial projections. Large capital intensive industries, like the Renewable Energy sector and other sectors under CleanTech, can thrive if long term returns can be maintained. However, because of the financial meltdown of 2008, the government has now been placed in the drivers seat in terms of regulations and even in management of certain sectors of the industry.
I believe five important factors have to be looked into in order to create a stable environment for a sustainable economy for people of all income groups:
1. We have to know the future of health care costs. Whether we include the uninsured or we look at reducing the cost of health care insurance, we have to know the cost of health care. The Democrat. should get this over with even if they have to use “Reconciliation”.
2. We have to know the status of various taxes. No one can plan their growth strategy without knowing available cash from profits. Pending tax issues are critical for any business plan.
3. Government stimulus packages must end. When the financial meltdown started, maybe it made sense to come up with a stimulus package. Maybe in 2009 a few more packages were necessary. However ongoing stimulus discussions distort the economy by accelerating market demand or create a false demand. For capital intensive projects, private sector money has to compete with government money. The view of Ron Paul in many cases are considered “too libertarian”, however his view on the “federal stimulus” is interesting.
4. The cost of education has to come down. If at all there was a sector that needed stimulus money, it is the “education sector which needs this money”. It costs $60K to $120K for an undergrad degree in engineering in the US. It costs $10k in a country like India. Compare the payback period of the investment in education in these two different countries. For our talent to be competitive, we need to have affordable education in science and engineering. We have to maintain the supply of left brain centric talent while creating right brain centric education reforms.
5. Create tax free export zones in all 50 states. The US is the most innovative country in the world. We have the best infrastructure and mindset for research and innovation. We need to create a global mindset and conditions to create products and services for the global market. We need to offer the best incentives for global players to leverage the US market and infrastructure to create products for the world market and then export worldwide. This can assist to achieve “double the export goals of President Obama”