A recipe for economic recovery - Op Ed

Rand PaulTim Couch

Sen. Rand Paul / Rep. Tim Couch Op Ed
July 30, 2015

Unemployment is causing harm in communities and cities all across America, and this driver of poverty is often too prevalent in our communities here at home. Our counties in Eastern Kentucky, particularly Clay and Leslie, have consistently ranked among the highest for unemployment in the state, and we need a comprehensive solution that goes far beyond a government stimulus.

While the Obama administration has designated an eight-county region in southeastern Kentucky as one of several “Promise Zones” in our nation, that doesn’t go far enough. We are proposing an empowering solution using the resources we have right here in Kentucky – designating affected counties in Eastern Kentucky as an Economic Freedom Zone.

Designating eligible counties in Eastern Kentucky as an Economic Freedom Zone would provide great relief for the communities struggling under high taxes, burdensome EPA regulations, and the War on Coal. By slashing government’s red tape and drastically reducing taxes, we could give our communities an opportunity to escape poverty and leave more money in the hands of those who’ve earned it.

Economic Freedom Zones are areas of reduced taxes and regulations, and increased incentives for businesses. They are much more than a government stimulus or handout. They empower communities by leveraging the human capital, natural resources, and business investment opportunities that already exist. Reducing taxes in economically depressed areas is a stimulus that will work because the money is returned to businesses and individuals who have already proven that they can succeed. 

This isn’t a government handout, and special interests don’t get to decide where the money goes. The money will stay with the people that consumers have already voted for and to the people who have already proven they can run a business. This is a stimulus funded by dollars from the place being stimulated, our communities right here in Eastern Kentucky. By keeping more money earned in Eastern Kentucky, we are enabling those who have proven to be successful at business and creating jobs to continue doing that by keeping more of the money they have earned.

Too often, when government picks the winners and losers, we end up with mostly losers. With Economic Freedom Zones, that will not happen. The lower taxes will benefit any business that consumers have seen fit to endorse. Only consumer-tested winners will get the money, and through their success, create jobs for the rest.

The entire Eastern Kentucky region currently has 19 counties with unemployment rates above 8 percent, and nearly all of Eastern Kentucky is well above the national average. The latest numbers show Clay and Leslie counties with an unemployment rate of around 9.8 percent.

But our current economic state in Eastern Kentucky is far worse than the unemployment numbers suggest. These numbers do not account for those who have dropped out of the workforce or were never a part of the workforce to begin with. Some of these counties have less than half of the total population working. This is why we desperately need more jobs, more opportunity, and more incentive for businesses to locate in our communities. Introducing Clay and Leslie counties as part of an Economic Freedom Zone would keep our hard working communities’ tax dollars in the counties they came from - estimated at over $15 million in the first year alone, and over $155 million over 10 years.

The EPA regulations put in place by the Obama administration are suffocating the coal industry and stifling growth. Our plan will reduce the regulatory burden weighing down our communities. Our plan is one of empowerment. It will empower our region to innovate, prosper, and grow, all without the government obstacles that all too often hold us back. 

Economic Freedom Zones incorporate what has long been America’s greatest resource – the ability of individual communities to leverage free minds and free markets to create a more prosperous future. Eastern Kentucky’s families and communities deserve that future, and the opportunity to succeed and break the cycle of poverty.

 

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