Kantakom 1

Pheemapotwasu (Nicky) Kantakom

Mr. Brandon Nascimento

Individuals and Society 9

2 October 2018

Economic Issues and Conservative Democrats’ Rectification Scheme

Zuziland’s economy is currently substandard and requires severe alterations in order

to economically succeed. Under current jurisdiction, Zuziland has an adequate economic

growth and prosperity. It also has a highly regulated economy with major industries and

media owned by the government such as Zuzoil, the major state-owned oil producer.

Additionally, Zuziland just recently reduced subsidies for oil and gas, in effort to reduce

government deficit spending. Therefore, Zuziland should reform its economic policies by

employing principles of fiscal conservatism, such as promoting sustained economic growth,

deregulation of the economy, and encourage economic diversification, will promote

economic freedom and success in Zuziland.

Through diversifying the economy, Zuziland can achieve sustainable economic

growth. Firstly, the government should promote the movement of primary sector of the

economy from agriculture in to industry and services. This movement is already occurring in

Zuziland, however, without continuous support, this shift will slow down or discontinue.

Much like South Korea’s rapid economic growth that was deemed the “economic miracle”,

the government should assist private industrialists to undertake new projects by reducing

the risks they face (Ito et al.). This can be done in the form of tax reduction for specific

industries or lifting the environmental restrictions and concerns regarding specific industries

such as forestry, similar to what the Republican Party in the United States of America did in
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2016-8 (“What Are Donald Trump's Policies on Climate Change and Other Environmental

Issues?”).

Next, regarding sustainable energy investment which was proposed by several

governments, Conservative Democrats will promote centralized production of energy to

take advantage of economies of scale, and reduce the unit costs to generate them (Hoole

and Michael). As of now, renewable energy is not a viable solution due to the inconsistency

and unreliability of it. In mid-2018, Donald Trump has imposed a 72% budget cut Energy

Department’s Office of Energy Efficiency and Renewable Energy due to this exact reasoning

(Worland). Solar power is unreliable as sunlight can vary throughout the seasons, and at

night time, the sunsets, which means no energy production at night. Likewise, wind energy

is inconsistent, as wind patterns are unpredictable and can not be 100% accurately

forecasted. Therefore, reliable energy should be used instead of clean energy, burning coal

and oil is suitable for this job since Zuziland has deposits of these resources and can afford

to use them. Sustainable economic growth will allow the Zuziland economy to prosper by

raising the HDI, stimulating jobs and lowering unemployment rates, raising tax revenues and

reduce government spending on unemployment & poverty related welfare benefits and

stimulating new investment (“Sustainability, Well-Being, and Economic Growth”).

Deregulation of the economy in Zuziland will benefit local businesses and citizens.

This is because deregulation of the economy will lower barriers to entry into industries,

especially the oil and gas industry in Zuziland; it can also encourage market entry as

competition will be less controlled and much more benefits. This has been demonstrated by

the United States’ Republican party candidates Gerald Ford and Ronald Reagan. Gerald Ford

passed the “Railroad Revitalization and Regulatory Reform Act” which deregulated the

railroads. This deregulation has allowed the railroads to achieve a balance in demands and
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supply, as well as the ability to make business decisions independent of the government

(Vanderleest). Most importantly, the act allowed intra-industry competition in prices

between various railroad companies, which provoked the sector’s economic growth.

Likewise during Reagan’s presidency, he strongly believed in ​Laissez-faire economics, which

lead him to deregulate major parts of the finance, agriculture, and transportation sectors

(“The Man Who Sold the World”). This deregulation did not only occur in the United States,

the European Union followed the US in 1992, when it deregulated the airline industry. This

allowed european airlines to pick up additional passengers in another city within the

destination country, which encourages competition (Adler). Thus, driving prices down for

the end-user. The crux of the matter is that deregulation will promote economic freedom

and should be implemented in Zuziland. Zuziland currently has a state-owned oil company

called Zuzoil. Conservative Democrats aspire to promote privatization of Zuzoil and

deregulate the oil and gas industry. This will allow competition between private enterprises

to emerge and drive down prices to the consumer (Adler). Similarly, the government can

lease out state-owned media sources and property to private enterprises, including but not

limited to, TV channels and radio frequencies. Incorporating the concept of deregulation will

promote economic freedom and success in Zuziland.

Through concepts of fiscal conservatism such as corporate tax cuts, Zuziland can

stimulate the economy, which can reduce unemployment and benefit the economic welfare

of businesses and citizens. Similar to what the US has done in 2017 under the Trump

administration, they reduced the corporate rate to 21 percent from 35 percent (Townsend

and Kochkodin). This cut will allow corporations to have more funds available to hire more

workers and grow their businesses. Similarly, Canada also has cut their corporate tax from

28 percent in 2000 to 15 percent in 2012 (Montreal Economic Institute). This has created
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over 1.3 million jobs. This has worked so well that the conservative party in Canada plan to

slash the corporate tax even lower, which is forecasted to create an additional 1.3 million

jobs (Harper). Currently, Zuziland has about 6.82% unemployment rate, which equates to

almost 2 million people unemployed. Reducing the corporate tax will address this issue and

grow the economy. Secondly, this corporate tax cut will only be imposed on certain

industries, such as utilities, telecommunication service and industry. These sectors were also

the chosen sectors in Trump’s United States tax reform (Townsend and Kochkodin). These

sectors were chosen because current utility enterprises are decentralizing itself to avoid

high corporate tax rates. Hence, a reduction in utility sector corporate tax will allow the

enterprises to centralize their production and create more jobs. Likewise, Zuziland can

employ these techniques to reduce its unemployment rate, and simultaneously diversity the

economy.

In conclusion, some may believe that economic growth is a form of “creative

destruction” which makes old skills obsolete and will lead to socialism. Economic growth

also usually comes with environmental degradation. However, with economic growth comes

higher living standards and more freedom and choices that accompanies modernization. Old

skills can be replaced with newer skills. As technology advances, there will be newer and

more reliable ways to solve environmental degradation. The current solution that often

involves wind farms and solar farms are unreliable and inconsistent, as technology

increases, newer and more effective methods will be innovated. And most certainly, those

methods will be more effective than current solutions. As a whole, fiscal conservatism and

its policies, such as promoting sustainable economic growth, deregulation of the economy,

and economic diversification, brings together countless benefits towards Zuziland such as

reduction in unemployment, reduction in prices for consumers and raise the HDI of Zuziland.
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As a whole, fiscal conservatism will bring together more opportunities and countless other

benefits for Zuziland. Conservative Democrats will make Zuziland great for the first time.
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Works Cited

Adler, Jack. “Europe Moves Toward Airline Deregulation : Transportation: After 1997,

European Community Airlines Will Compete Freely for One Another's Domestic

Passengers.” ​Los Angeles Times​, Los Angeles Times, 26 July 1992,

articles.latimes.com/1992-07-26/travel/tr-4968_1_airline-deregulation.

Harper, Stephen. “Our Conservative Plan to Protect the Economy.” Poltext, 9 Oct.

2015.

Hoole, Michael E. McGrathRichard W. “Manufacturing's New Economies of Scale.”

Harvard Business Review,​ 1 Aug. 2014,

hbr.org/1992/05/manufacturings-new-economies-of-scale.

Ito, Takatoshi, et al. “Growth Theories in Light of the East Asian Experience,

NBER-EAS Volume 4.” University of Chicago Press, Jan. 1995.

“The Man Who Sold the World.” ​Google Books,​ Google, 26 Jan. 2010,

books.google.co.th/books?id=lv-HcSVoaJgC&printsec=frontcover&redir_esc=y

#v=onepage&q&f=false.

Montreal Economic Institute. “Canada's Corporate Tax Cut Success: A Lesson for

Americans.” ​PR Newswire: News Distribution, Targeting and Monitoring,​ 14

Aug. 2018,

www.prnewswire.com/news-releases/canadas-corporate-tax-cut-success-a-lesson

-for-americans-300695535.html.

“Our Conservative Plan to Protect the Economy.” Poltext, 9 Oct. 2015.

“Sustainability, Well-Being, and Economic Growth.” ​Center for Humans & Nature​,

www.humansandnature.org/sustainability-well-being-and-economic-growth.
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Townsend, Matthew, and Brandon Kochkodin. “Corporate America Is Saving

Boatloads on Trump Tax-Cut Windfall.” ​Bloomberg.com​, Bloomberg,

www.bloomberg.com/news/articles/2018-04-30/corporate-america-is-saving-boa

tloads-on-trump-tax-cut-windfall.

Vanderleest, Henry W. “Railroad Deregulation | Henry W. Vanderleest, Karoline

Bota.” ​FEE​, Foundation for Economic Education, 1 Oct. 1985,

fee.org/articles/railroad-deregulation/.

“What Are Donald Trump's Policies on Climate Change and Other Environmental

Issues?” ​Friends of the Earth​, Friends of the Earth Limited , 18 July 2018,

friendsoftheearth.uk/climate-change/what-are-donald-trumps-policies-climate-ch

ange-and-other-environmental-issues.

Worland, Justin. “Donald Trump Tries to Cut Renewable Energy Programs.” ​Time,​

Time, 1 Feb. 2018, time.com/5128572/donald-trump-clean-energy-research/.