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Book Review: The 4% Solution: Unleashing The Economic Growth America Needs by The Bush Institute and Brendan Miniter

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The 4% Solution: Unleashing The Economic Growth America Needs by The Bush Institute and Brendan Miniter is a treatise on growing the economy beyond the 2.3% rate in recent years which is below the average of the previous six decades. The authors look toward a 4% growth in GDP on a sustained basis.

The challenge is to grow economies at a high level without excessive industrial pollution as a consequence. This challenge can be met best with incremental industrial progress in solar energy, fusion power, coal gasification and other energy modalities in varying stages of research and development. The authors should have spent more time discussing these aspects.

The blueprint of the book unfolds by lowering the debt of the United States and allowing hard workers to exploit opportunities. Past years have shown that higher growth tends to reduce debt because larger tax receipts are received in response to more people working. The other debt component is to control the government spending within growth increments of the GDP.

Economic growth was greatest in the United States from 1950 – 2008. The highest growth in GDP was in the United States, Great Britain, Germany, Italy and Japan. Today, despite a host of challenges, prosperity in the United States exceeds much of Europe by 40%.

The authors point toward the top professions as agents for boosting the GDP. Along with the professions are highly educated people with degrees; such as, PhD, Masters, Bachelors and Associates. Computer related industries grew from $200 billion dollars in ’77 to $1.6 trillion dollars by ’07. These industries are telecommunications, systems design, data processing, publishing, computer and electronic products and services. The presentation should cover the employment of the blue collar work force to repair the infrastructure of the United States.

According to the authors, the top United States exports are operating leases, film, television, law, mining, engineering, education, finance, medicine, repair of equipment, industrial engineering , consulting and travel. The book explains that free markets encourage workers, companies and investors to undertake more productive activities.

Free markets do require some regulation to protect consumers and prevent too much leveraging in the stock market, as well as discouraging risky practices in derivative transactions. At a minimnum, the derivative transactions should be dealt with comprehensively by supplementing  the Uniform Commercial Code. These issues could have been dealt with more extensively in the presentation.

The authors support the idea of a lower federal debt with increments in property taxes for immovable property, higher consumption taxes and a fairer collection scheme for personal income taxes. The sum total of doing these things would equate to a pro–growth policy implementation according to the authors. Also, taxing the underground economy is another noteworthy idea.

The 4% Solution has some important contributions to make with regard to the ongoing debate on the economy. The discussion on free markets is subject to the cooperation the United States gets from its trading partners. The idea of lowering the federal debt will be partially dependent upon the United States staying out of future foreign entanglements and wars.

In addition, the population in the United States has been growing by nearly a million people a year beyond the death rate. Ultimately, government planners must examine whether or not this growth rate in population is sustainable for the long term. The book doesn’t place much emphasis on this area.

The authors don’t have enough discussion on the need to upgrade a failing infrastructure which has required attention for decades. Saving Medicare and Medicaid would be simpler to do by reducing the cravings Americans have for junk food along with a tendency to function without daily exercise. Perhaps, the best way out of the junk food albatross is to raise excess consumption taxes to fund the public health care programs. To its credit, the Bush Institute has left increments in consumption taxes on the table as a policy option. This book deserves some consideration on the merits with the inclusion of the provisos listed above.

About Dr Joseph S Maresca

I've taught approx. 34 sections of collegiate courses including computer applications, college algebra, collegiate statistics, law, accounting, finance and economics. The experience includes service as a Board Director on the CPA Journal and Editor of the CPA Candidates Inc. Newsletter. In college, I worked as a statistics lab assistant. Manhattan College awarded a BS in an allied area of operations research. The program included courses in calculus, ordinary differential equations, probability, statistical inference, linear algebra , the more advanced operations research, price analysis and econometrics. Membership in the Delta Mu Delta National Honor Society was granted together with the degree. My experience includes both private account and industry. In addition, I've worked extensively in the Examinations Division of the AICPA from time to time. Recently, I passed the Engineering in Training Exam which consisted of 9 hours of examination in chemistry, physics, calculus, differential equations, linear algebra, probability/ statistics, fluids, electronics, materials science/structure of matter, mechanics, statics, thermodynamics, computer science, dynamics and a host of minor subject areas like engineering economics. A very small percentage of engineers actually take and pass the EIT exam. The number has hovered at circa 5%. Several decades ago, I passed the CPA examination and obtained another license in Computer Information Systems Auditing. A CISA must have knowledge in the areas of data center review, systems applications, the operating system of the computer, disaster recovery, contingency planning, developmental systems, the standards which govern facility reviews and a host of other areas. An MBA in Accounting with an Advanced Professional Certificate in Computer Applications/ Information Systems , an Advanced Professional Certificate in Finance and an Advanced Professional Certificate in Organizational Design were earned at New York University-Graduate School of Business (Stern ). In December of 2005, an earned PhD in Accounting was granted by the Ross College. The program entrance requires a previous Masters Degree for admittance together with a host of other criteria. The REGISTRAR of Ross College contact is: Tel . US 202-318-4454 FAX [records for Dr. Joseph S. Maresca Box 646 Bronxville NY 10708-3602] The clinical experience included the teaching of approximately 34 sections of college accounting, economics, statistics, college algebra, law, thesis project coursework and the professional grading of approx. 50,000 CPA examination essays with the American Institute of Certified Public Accountants. Additionally, membership is held in the Sigma Beta Delta International Honor Society chartered in 1994. Significant writings include over 10 copyrights in the name of the author (Joseph S. Maresca) and a patent in the earthquake sciences.