Keynesian economic thinking versus classical economic thinking. Another dig at Lawrence Summers.
I’m of the same opinion as Thiel in this. In order to supply economic growth in the US, we need to make it easier for people to create.
We have a problem because so much of the supply side is throttled by regulations. Starting a business is hard in the USA. Business owners pay self employment taxes and are forced to create compensation packages that match government legal requirements (minimum wage, health care, w-2 type tax obligations). Most US citizens spend their entire lives here so the administration cost is considered healthy behavior. This administration cost is not healthy.
My European friends are generally surprised with the complexity of the process we go through to do our federal income taxes. But the Europeans are more likely to have complex state run demands on their time than other parts of the world. When I compare my business processes in the USA to those of friends in Asia, Central or South America, it’s clear that we have a great weight on our shoulders when we build US based businesses. The administration costs are only the first step on a stairwell of unfriendly business behaviors.
To start a hair cutting business, one must go into debt to attend state mandated schools.
To start a campground the entrepreneur has to spend thousands developing plans for city, county and state organizations.
So doing things in the physical world today, is more expensive than doing things in the digital world. Perhaps that is why we see so much economic development on the internet these days, and less on the street.