The Capitol Hill standoff between Democrats and House Republicans may be over (for now), but more than 165,000 businesses say the budget deal reached by Congress last week does not go far enough to address the underlying economic problems afflicting the nation. The American Sustainable Business Council (ASBC) has called for policymakers to stop imposing austerity and begin making strategic investments to foster a sustainable economy.
The U.S. government has a long history of making such tactical investments, which led to breakthroughs in transportation (federal highway system, commercial aviation), energy (nuclear, the Tennessee Valley Authority), information (semiconductors, the Internet), and medical (the National Institutes of Health).
Continuing to invest in areas like upgrading the energy grid and aging infrastructure are needed to kick-start U.S. leadership in important new technologies, which will drive job creation and raise the overall efficiency and innovation of the economy, ASBC claims.
Unfortunately, the government currently is doing the exact opposite with austerity measures imposed by the sequester, which took effect March 1. This slashed federal spending by $85 million in the remainder of the 2013, affecting mostly education, defense and social programs. An additional $1.1 trillion will be cut over the next decade.
The recent government shutdown and threat of default has only increased calls for austerity. ASBC warns that these past, present and future cuts are perpetuating high-unemployment and hindering the recovery.
“The core idea in sustainability is investment in the future, to build up all forms of capital, not spend them down,” ASBC said in a statement. “These resources include social capital, financial capital, intellectual capital, and natural capital – managed wisely and deployed to make the economy more productive, more resilient, more competitive, and more equitable.”
Just as the U.S. should invest in promising new technologies, so should it disinvest from areas that no longer need or warrant special treatment, and where industry should survive on its own merits, ASBC says.
A good place to start would be agricultural commodity subsidies and mineral leases. In July, Congress passed a farm bill that will cost taxpayers nearly $200 billion over the next decade. According to the Environmental Protection Agency (EPA), less than 1 percent of Americans claim farming as an occupation. The numbers speak for themselves.
Military spending also could be reeled in, especially on weapons programs the armed forces don’t even want. In 2012, the U.S. spent $682 billion on defense, more than China, Russia, the United Kingdom, Japan, France, Saudi Arabia, India, Germany, Italy and Brazil — combined. Most of these countries are longtime U.S. allies.
Ending corporate welfare in the form of tax subsidies to the fossil fuel industry could free up funds for sustainable business investment, ASBC says. A report released in March by the International Monetary Fund (IMF) claims ending the $1.9 trillion in global energy subsidies could reduce greenhouse gas (GHG) emissions by 4.2 billion tons – a 13 percent reduction – and lead to major gains both for economic growth and the environment. Eliminating tax incentives for companies to shift jobs and profits overseas also could help lead to improved economic conditions in the U.S.
“A sustainable economy will be built on a foundation of smart, strategic investments and a genuine appreciation by our federal policymakers that responsible negotiation is a noble and necessary requirement for a well-functioning democracy,” ASBC concluded.
Based in San Francisco, Mike Hower is a writer, thinker and strategic communicator that revels in driving the conversation at the intersection of sustainability, tech, politics and law. He has cultivated diverse experience working for the United States Congress in Washington, D.C., helping Silicon Valley startups with public relations campaigns and teaching in South America. Connect with him on LinkedIn or follow him on Twitter (@mikehower).