Five ways to destroy the US economy–It won’t be hard to do—53h
Is a slow-growth future inevitable for America? More than ever, of that’s the conclusion of economists, and it’s a recurring theme of some presidential candidates.
The past seven years have seen the weakest recovery in modern U.S. history, showcased by stagnant incomes and an illusion of low unemployment, while millions have given up on the labor force. Slow growth is not inevitable, but federal policy “defaults” are stuck in the wrong place. Capital markets are hamstrung by Dodd-Frank, health markets are hamstrung by the Affordable Care Act, and structural deficits are on autopilot toward a national debt crisis.
With an election like this one, it is probably more useful to explain the most destructive policies. Here are our top five.
- Restrict Trade. Free exchange is the cornerstone of a growing country. lf the next president is serious about destroying prosperity, (s)he will follow through on the empty rhetoric about “exporting jobs”—arguably the most economically ignorant, antigrowth phrase in public discourse. Raising tariffs will restrict imports, cause inflation, and deeply harm American consumers. Killing the Trans Pacific Partnership alienating Canada over the Keystone pipeline, and curtailing legal immigration would be just a start.
- Make Work Illegal. ln the United States today. over 30 percent of jobs require government license; in the 1950s, only 5% did. This creeping need for permission to work hobbles entrepreneurs and keeps untold millions out “the labor force.
- Tax People More Unequally. Even President Barack Obama, author of much of the new complexity, campaigned in 2012 on the need for a “Buffett Rule” to flatten the tax code. The United States has not budged from 35 percent, leaving us with the highest corporate tax rate in the world. As a direct consequence, our companies are abandoning their headquarters by inversions and essentially fleeing to foreign domiciles.
- Stop Innovation. In Washington will keep gumming up entrepreneurship with red tape. A generation ago, 1 in 6 companies were, startups; today one in 12 are.
- Increase Debt. Debt has more than doubled in the past decade, yet interest payments in 2015 were exactly the same as in 2006, because rates are artificially low. * The Congressional Budget Office projects payments to “rise sharply” in the near future, tripling in nominal terms as interest normalize.
The good news about this policy agenda—what really makes it different from others—is that it requires no sacrifices. No new laws. No action by Congress. If Washington just stays on course, we will reap the whirlwind without any additional effort, or thought, at all.
source-weekly std., glenn hubbard, tim kane,