I watched the GOP presidential debate at the Reagan Library and thought the answers and rationals for the cures of our economy completely lame. If you understand what will or can drive the economy, you will understand that every one of the candidates ignored the only reasonable solution. Not to mention, what solution for our economic ills can be expected when you invite cultural warriors like Rick Santorum to the debate and bar those like Buddy Roemer from participating.
First, however, a short message to the Administration, which has failed miserably in this regard as well. You bailed out the banks and it did not help anybody but the banks. Then you gave billions to big business thinking that they would share the wealth with everyone else, and they did not. Then you gave money to the states thinking that would help, but they just used it to plug their own sinking ships. You denied the bankruptcy courts the ability to restructure mortgages to keep people in their homes, substantially handicapping the home prices of everyone but the rich and decimating the mortgage market for everyone not paying cash. You passed health reform legislation that did not have a public option and the enactment date was kick out so far in the future it could not possibly help anyone now. You extended unemployment benefits to those that were formally employed, but in no way help the self-employed who have lost business. Then you cut social security taxes temporarily in a way that disproportionately helps those working for others. The tax base has shrunk by millions of people put out of work in the process because you cannot do enough to make big business hire workers. As a result of the shrinking tax base, huge deficits continue to mount, impacting the economy further, and hurting solos disproportionately.
I do not know what the President plans to propose and the GOP plans to oppose, but I can just about guarantee you that BOTH will ignore the main group of people that are building and maintaining this economy, as it is.
Of course, I am talking about the self-employed or, in the case of lawyers, the solo practitioner.
I think we have to face the fact that the workforce of America has substantially changed since we last visited this type of hard times. As a result, prior remedies are not going to work. It is the failure of those in government to not recognize the trend.
I am so tired of hearing the GOP call the mega-rich "job creators". What a canard. The statistics of the last 8 years shows this is not true. As we say in Texas, "a turd is a turd n' callin' it a rose ain't goin' to make no never mine".
Here is the reality of today. Thirty-one percent of our entire labor force (nearly one in three eligible workers), over 40 million people in all, are SELF-EMPLOYED! And, this trend is increasing with an expected 40% of workers to be self-employed by 2019. This includes the overwhelming majority of lawyers.
Solos are the drivers of the economy. It will only be due to the efforts of these self-employed and solo practitioners that the economy will recover. These people represent the future. It is the result of tech, it is the Google-ization of the economy. It is the Third Wave, which has arrived. This fact is being ignored at the risk of our future.
You want employment to increase? You give solos some relief and the ability to expand and grow. You want the housing market to recover? You give solos the ability to buy homes. You want taxable income to increase (meaning more government revenues)? You throw solos a bone or two to help make this happen.
Yet, you will not hear about solos much from the government. They will ignore one out of three workers in this country and talk about what to do for big business, medium business, and small business. They will talk about how to rev the Dow Jones while completely ignoring Doug Jones.
Solos are shouldering all of the risk that were formally borne by companies in this current economy.
Here are a few, but by no means all of, the things that need to happen immediately in order for solos to thrive:
1. Create secured financing for the building and building out of co-working locations. Solos need a place to work and currently construction financing of commercial spaces is based upon long term leases. Shared work environments do not depend on long term leases.
2. Bypass tightfisted bankers and issue small grants and low interest loans to solos.
3. Student loan forgiveness, or at least interest-free abatements, while people are getting their feet wet while going out on their own. We do not need to be bankrupting people before they even start.
4. End the laws that tax solos as medium-sized employers.
5. Allow solos to deduct health-insurance premiums and other expenses in the same fashion as big business.
6. End the employer share of Social Security and Medicare from the solo's contribution. Realize that solos on average make about a third less than people in similar jobs at companies, but have to pay twice as much of their gross income as they are required to pay both the employer and employee shares of Social Security and Medicare.
7. Approximately two thirds of solos work in jurisdictions that tax unincorporated businesses at an average rate of 4% of profits. This needs to end.
8. Solos need to be made eligible for unemployment insurance or subsidies, as well as worker's compensation. Just because you do not work for someone else does not mean you cannot lose your income. Just because you work for yourself does not mean you cannot have a work related injury.
9. Most solos cannot afford health and life insurance, and their only hope is to pray for good health. There has to be actual competition in the market to make quality health care affordable. Start by removing the anti-trust provisions as to insurance carriers and create public options for basic health care in order to make big insurance companies behave. And, allow consumers the right to enforce their own rights in our courts against insurance companies that do not behave. You can forgo all of the requirements of Obamacare, Romneycare, or government mandates IF you have truly competitive competition in insurance coverages that allows abundant choice for the consumer.
10. Congress needs to re-enact the Small Business Jobs Act, which expired at the end of last year. It allowed solos to fully deduct their health care premiums before Social Security and Medicare taxes were assessed. In otherwords, Congress actually increased taxes on solos during these hard economic times while threatening to wreck the economy over taxes on the rich.
11. Labor laws need to be amended to cover non-payment of fees to consultants and solo lawyers that provide services to big businesses on a routine basis. This would level the playing field by shifting the burden from solos to the big businesses charged with nonpayment.
12. The government and the markets need to quit punishing solos for the bad conduct of mortgage originators, and begin again to guarantee stated income loans for solos so that they might be able to buy houses. Should 40 million people and families practically be allowed to buy and sell their homes, trade up and trade down as needed, the houseing crises will be over.
It is time to recognize that the ranks of solos have both increased and they have also been punished the most by this economy. And, since solos represent the single greatest source of job creation today and into the distant future, we cannot have recovery until the solo recovers. Solos cannot leap to the status of healthy employers if the emphasis for reform is not squarely focused on the solo. The housing market will not rebound until the solo can easily buy and sell housing. Big business will not fully prosper until solos can buy all of the tech, vehicles and services they need. Solos cannot buy what they need if every penny they make over expenses is going to pay for health insurance and student loans. When solos quit struggling, then the economy will quit struggling. We will support solos for the benefit of all or we will continue to ignore and punish them at the expense of all. Supporting solos will only strengthen the economy.