WASHINGTON (MarketWatch) — An unemployment rate of 9%-plus is pretty bad, but there are worse things, such as building a country that can’t afford clean air, that can’t see the value of educating its children, and that settles for a financial system that’s rife with favoritism and prone to frequent breakdowns.

We don’t have to settle for a second-rate economy but it’ll take some smart policy making to achieve more than what we’ve got now. Unfortunately, the next election looms ahead in just 14 months. The window on doing anything smart is closing fast…. if it’s not already too late.

All the serious Republican candidates for president have put forth their economic plans, in varying degrees of detail. Most of them share a core set of policies, none of them new or surprising: Lowering taxes, lessening the burden of regulations and increasing domestic energy production.

Republican presidential candidates Mitt Romney, Rick Perry and Michele Bachmann. Reuters

As for the Democrats, their plan seems to be the Republican platform, except with a human face.

The Republican critique of the U.S. economy is remarkably consistent. Through good times and bad, boom and bust, bubble and meltdown, the same policy prescriptions apply, exclusively focused on increasing supply by lowering costs that businesses pay.

The Republicans say that, if we want to compete with the Chinese, the Indians, the Europeans and the Mexicans, we must create a more competitive economy by lowering the tax burden on the “job creators,” stop the government from “killing jobs” with regulations, and take advantage of our immense coal, natural gas and oil-shale reserves.

It’s quite simple. But does the Republican critique make any sense in light of today’s economic problems? Do we have 9% unemployment because U.S. taxes are too high? Because U.S. regulations are too onerous? Because high energy prices are hobbling our competitiveness?

Let’s stipulate at the outset that no one (except Warren Buffett) likes to pay taxes, and no one likes to be told how to live their life or run their business. But let’s also stipulate that paying taxes and obeying rules is the price of living in a civilized country under the rule of law, with a functioning and stable economy, a modern infrastructure, a healthy and productive work force, and property rights that are respected and enforced.

The question is not whether we should be taxed or regulated at all; it’s whether taxes are too high and inefficient and whether regulations are pointless and burdensome.

The evidence from around the world and here at home doesn’t give much support to the Republicans’ argument that it’s the government that’s holding our economy back. Our costs are not out of line with our competitors, and those costs have not increased dramatically since 2007, when the unemployment rate was less than 5%.

The tax burden in the United States is relatively low.

Are U.S. taxes high? No. Compared with other developed countries, U.S. tax rates are relatively low. According to the Organization for Economic Co-operation and Development (a sort of global think tank), Americans paid about 28% of gross domestic product in taxes to all levels of government (federal, state and local) in 2006, compared with an average of 36% for the 30 countries in the OECD.

Only Mexico, Turkey, Korea and Japan have a lower tax burden than we do. Even in Greece, where tax dodging is notorious, a higher percentage of taxes is paid than in the U.S.

And, although the United States has a high statutory tax rate of 35% on corporate income, the effective rate is only about 27% because of various loopholes and exclusions, a bit lower than the average for other large countries. Corporate taxes account for less than 2% of GDP, less than in most other countries.

Mitt Romney and other Republicans in the Congress and on the campaign trail argue that if we would just lower the tax burden on corporations, they’d have the money to invest in America, which would create jobs. Read more about Romney’s economic plan.

Corporations have all the cash they need to invest in America.

However, U.S. corporations already have all the money they’d need to create more jobs. After-tax corporate profits are at a record level, both in absolute terms and as a share of national income. The latest figures show after-tax profits surged to a record 11.3% of national income, almost 5 percentage points higher than the post-war average of 6.6%.

Corporations have increased their investments since the darkest days of the recession, but they are still sitting on a mountain of liquid assets, estimated at $1.9 trillion in the first quarter of the year.

It’s not lack of cash that’s holding back hiring at major U.S. corporations, but lack of sales. Cutting corporate taxes and simplifying the tax code may be worthy objectives, but they won’t do much to increase hiring.

Are American businesses over-regulated? No. Compared with other nations, the regulatory burden on businesses is relatively light, according to the World Bank’s “Doing Business 2011” report, which looked at the costs and the red tape that businesses face in getting started, raising capital, getting credit, buying property, building structures, trading in foreign markets, and complying with tax and other laws.

Compared with 183 nations, businesses in the United States have the fifth lightest regulatory burden, behind Singapore, Hong Kong, New Zealand and the United Kingdom. China ranked 79th, Brazil ranked 127th, and India ranked 134th. See the World Bank’s report.

Yes, we should always keep an eye out for needless regulations, ones that just raise the cost of doing business without offering offsetting benefits.

But the Republican candidates want to go far beyond that. Michele Bachmann wants to abolish the Environmental Protection Agency completely. Mitt Romney has proposed that the total cost of federal regulations be frozen: that for every new regulation implemented, an old regulation with an equal or greater cost be eliminated. But Romney proposes to look only at the costs of new regulations, not their benefits.

That’s a short-sighted view. Stronger regulations on mortgage lending might have cost the economy hundreds of billions of dollars but they would have prevented a financial meltdown that cost us trillions of dollars. Stronger regulations on nuclear-plant design might have saved the Japanese economy hundreds of trillions of yen, and could be a good idea in America as well.

New regulations do have costs, but what about the costs of not regulating? That’s not even considered.

Are high energy prices making us less competitive? No. Americans pay less for energy than those in most other developed countries, according to the International Energy Agency. The United States has some of the cheapest prices for gasoline, fuel oil, natural gas, coal and electricity. See the IEA’s global statistics.

It’d be good to have lower and (especially) more stable energy prices, but it’s not the thing that’s holding our economy back.

The Republican candidates’ prescriptions for fixing the economy don’t address the causes of our distress: lack of demand. The root cause of our tepid recovery is the large overhang of debt — especially mortgage debt — among U.S. households and banks.

You can throw all the money you want at corporations, and cut all the red tape you want, and drill for oil everywhere you want, but it won’t fix our problems.