Opinion: Economic policy reaches a tipping point too perilous to breach

There is a great deal of speculation that uncertainty is what is retarding our chances of economic recovery.

Small businesses, and large ones for that matter, are suffering from a fear of the unknown. They have no predictability as to the future actions of the government and how it will affect their profitability.

They do know that if their taxes go up, if regulations are going to stifle them or increase their costs or if federal policies of adding excess debt continue to crowd out their access to credit, then their ability to grow and add jobs will be reduced.

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These are real concerns, and they are affecting investment and expansion decisions being made by American businesses.

But the uncertainty goes deeper than these issues.

Many small businesses see no upside to taking risk, to putting in the extraordinary extra effort that is required to increase their business. They look at their situation, even if they are doing well, and ask why they should bother to work harder, take more risk and carry more costs when their government has so little respect for their effort and takes so much of their hard-earned results.

There is a fundamental shift going on in this country. The people who have been the risk-takers, who have been the engines of our economic expansion and prosperity, are losing interest. They have no confidence that the people who run their government understand or appreciate how difficult it is to create a job and build a business.

This is a deeply significant culture change. At its center is the fact that the individuals who are the initiators of economic opportunity are deciding that opportunity is not worth the price with the excess of government that exists. This is not a pervasive attitude yet, but it surely is one that is growing.

It is the culture of a social welfare state. It is an attitude wherein the governing class says it will retard the exceptional in the name of benefiting the many. It undermines the essence of American prosperity, which historically has resulted from rewarding the productive risk-taker, who through his or her success has energized the growth of the nation.

We now have an administration and a national party led by House Democrats that have a deep suspicion of the American market economy. They do not really believe in capitalism, and they generally look on profit as public property, to be dispersed according to the logic of the elected class.

It is legitimate that a small-business person should be worried and hesitant to take on more risk by expanding in this political climate.

There is a fundamental disconnect for the Obama administration to claim that job creation is its goal while it pushes the nation toward a social-welfare-state model of government. This can only be explained if one believes, as the administration obviously does, that jobs are created through the expansion of a government in a quest for social justice as defined by those who are governing.

It is not the immediate uncertainty of tax, regulatory and deficit policy that is the most significant retardant to our potential growth. It is the simple fact that we might be closing in on a tipping point wherein those who are the core producers in our society begin to disengage.

Their disillusionment as a result of government excess carried out in the name of social good is the real potential problem for our nation’s economic well-being.

This is a tipping point we cannot afford to cross. We should not move to a time of mediocrity where everyone’s standard of living is adjusted downward as a result of having a government that smothers the risk-takers in our country.

It is time to step back, to confirm the importance of individual initiative and stop this march toward a European-style social welfare state.

The values of capitalism, markets and profit have been key drivers of our nation’s advantage over the rest of the world, enabling us to become the most successful country in history with the highest standard of living.

It would be good if the people who govern us understood and believed in these unique American strengths.

Judd Gregg is a former governor and six-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee and as ranking member of the Senate Appropriations subcommittee on Foreign Operations.