Factoring Blog - For Small Businesses

Mike Stevens over at AllBusiness.com has an interview with U.S. Presidential candidate Senator John McCain’s chief economic advisor that’s pretty interesting.

McCain’s advisor, Douglas Holtz-Eakin, was asked what government could do to make it possible to keep jobs in America.   His response points out that businesses are going to do what makes financial sense.  If the costs are significantly lower offshore, then that’s where they’ll go.  He then goes on to point out that government can help reduce costs here in the United States:

The basic calculus is pretty straightforward. You look at what it will cost, what your productivity is here, and what it is there, and how you’ll net out. Business people have to do that arithmetic. But the government can do a lot on both sides of that equation. Cutting taxes and alleviating direct cost burdens and, more slowly, [enacting] health care reforms that take some of the cost pressure off, and education reforms that produce better workers in the U.S.

(Stevens said he asked all the candidates the same question and only McCain answered. So that’s why the focus on McCain.)

As long as the cost structure is lower for producing goods offshore, most businesses will make the cost effective decision.

What do you think? Is the right approach to lower taxes, reduce expensive government paperwork and do similar reforms? Will that make any difference to outsourcing?

This entry was posted on Thursday, January 31st, 2008 at 1:47 am and is filed under Business Operations. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.