Former SEC Chairman Presents Talk on Building A Stronger and Brighter Economy
In a sweeping speech at Sacred Heart University on April 11, former Securities and Exchange Commission Chairman Richard C. Breeden said government spending and regulation are standing in the way of America's recovery, and that presidential leadership is needed to turn the economy around. This event, held in the Schine Auditorium on campus, was part of the John F. Welch College of Business’ “Conversations” lecture series.
“We must not stand by and let government spend the country into national insolvency,” Breeden told the crowd of faculty, students and guests. “Every American -- young and old, rich and poor -- is put at risk by this out of control situation.”
Despite four years of fiscal stimulus, two rounds of quantitative easing, and the Federal Reserve's historically easy monetary policy, “We still have had the weakest recovery from a recession since before World War II,” Breeden said. “Driving interest rates close to zero helps finance government debt, but it also severely damages savers and investors just like a tax, and drives them into riskier investments.”
Breeden added that the United States is an “economic crossroads” where our national debt, like that of several European countries, will be impossible to service when interest rates rise. “The case for action needs to take account of several realities,” he said.
“First, we need to focus our energies on removing barriers to economic growth,” Breeden said. America can do that by reducing tax rates for both individuals and businesses to spur growth in the Gross Domestic Product, and by moving “aggressively to roll back regulatory barriers where excessive restrictions or costs get in the way of growth and job formation. Putting millions of people back to work should be worth taking a few regulatory chances, although that doesn't mean the wholesale abandonment of important protections.”
“Second, we need to trim the absolute level of spending, not just reduce its rate of growth,” he said. “It is pretty simple that we can’t get the debt burden down to more realistic proportions unless we stop spending so much.”
“Third, reforming our tax system will allow us to eliminate trillions in tax expenditures that provide benefits for some taxpayers, but not for all,” said Breeden. “Tax reform has the potential to help every business expand significantly, as well as to deliver more disposable income for every family.”
The U.S. must also reinforce entrepreneurialism, Breeden told the Welch College audience. “This is a major issue for our future, and also for the wider world. Producing enough jobs and opportunity will require a focused effort to encourage the formation and growth of business.”
“Economic opportunity and entrepreneurialism are part of our birthright as Americans,” Breeden said. “I have confidence that the next Apple is actually brewing in some young person’s mind right now, and that the next generation of business leaders will help create, not just pursue, opportunity around the world.”
“As long as we remain true to our entrepreneurial heritage, there is not any reason why our best business days cannot be in front of us rather than behind us,” he added. “However, while the jobs and economic opportunity of the future will come from the private sector like they always have, public policies relating to taxation, regulation, infrastructure, finance, energy and other subjects should be designed to make the job of business success easier rather than harder.”
Recalling his days serving three presidents in economic positions in the White House and as SEC Chairman, Breeden said, “There is simply no limit to what effective leaders can accomplish. Through force of character and inspired leadership, Presidents Reagan and Bush changed the world in ways few could even have imagined when they took office. Having sat in the room, I can tell you that thoughtful and determined Presidential leadership can be an amazingly force for good.”