26 May 2024

My Plan to Raise Growth and Incomes

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The key to boosting the income of the middle class, to increasing economic mobility for every American, is to increase the rate of economic growth. Right now, the economy remains stagnant following a brutal recession. Unimaginably high national debt is still growing. The entitlement state is out of control and will compromise America’s future. The heavy hand of government regulation reaches into every corner of modern life.

The president tells us that our lives are really better than they feel to us—and that, if they’re not, it’s not his fault. We must put an end to this toxic mix of pessimism and arrogance and fantasy. The challenge is clear. Consider: First, the weak recovery has pushed too many full-time workers into part-time work. While overall employment is higher today than it was at the pre-recession peak in 2007, the number of full-time employees is still 3.2 million below the peak in the third quarter of 2007, according to the Bureau of Labor Statistics. That’s unacceptable.

Second, the labor-participation rate has remained disturbingly low throughout this administration. At 62.8%, the rate is the lowest since the Jimmy Carter 1970s. The biggest drop, in percentage terms, has been among the youngest members of the workforce.

Finally, these past six years have seen a weak economy combined with a set of monetary policies that were geared for the wealthy, exacerbating the very problem the left loves to harp on: income inequality. The best way to address income inequality is to nurture overall growth. Incomes for most Americans grew during the economically healthy 1980s and ’90s, and inequality increased during the anemic 1970s.

It is time to send a signal—both to the American people and to the world—that the U.S. is returning to its pro-growth roots and its pro-growth policies. Here’s how to make it happen. 

  • First, we must target the tax code, because today it is targeting us—discouraging individuals, hampering new businesses and sending job creators offshore. The country needs comprehensive tax reform now. The tax code is bloated—over 70,000 pages and four million words, filled with rules and regulations, quirks and quacks that aren’t good for anybody. By the IRS’s own estimates, Americans spend 3.32 billion hours of their time complying with the code. We should eliminate or modify enough deductions, credits and targeted provisions in the code—both on the personal and the corporate side—to ensure that the plan, combined with other measures I am proposing, is revenue-neutral and doesn’t materially increase the deficit. One approach in this regard would be to cap the total amount of deductions and credits that an individual or married couple could take.
  • Second, it’s time to reform and reduce overbearing government regulation. On my first day in office as governor of New Jersey, I signed Executive Order No. 1, which froze for 90 days the issuance of any new regulation. It was to send a clear message to the overzealous regulators and to the business owners they tormented: A new pro-growth approach to regulation was here. The next president should do the same thing, sending the same message to the regulatory beast that the federal government has become under this president. Regulation must be rational, cost-based and used only to implement actions that are explicitly authorized by statute. This era in which an ideological administration tries to accomplish through the regulatory state what it didn’t have the votes to accomplish in the duly elected Congress must end.
  • The third step to promoting economic growth: Institute a comprehensive and effective national energy strategy. To truly seize the potential of the North American energy renaissance, we need to build the Keystone XL pipeline, lift the ban on crude-oil exports, create fairness in the way the energy industry is regulated, and expand research into new technologies.
  • The fourth pro-growth step involves changing the current counterproductive policies. We must reduce the marginal cost to the employee of taking a job, and reduce the federally imposed cost to an employer of hiring someone.
  • Finally, America must remain the home of innovation in the world. America will not remain the home of innovation if we allow our world-leading research universities to wither on the vine. Being the leader in innovation requires a focus on education, both K-12 and higher ed. With the energy of the American people, the pent-up demand to be freed from regulation, and the pent-up capital ready to be invested if companies are given enough positive signals, there is no reason America cannot return to the path of strong economic growth. With it will come a restoration of American authority, strength and optimism.

Click here to access the full article on The Wall Street Journal.

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