Friday, September 16, 2016
Podcast: Trump's 4% Economic Growth Goal is NOT "Boring"
Hello and welcome to the Citizen Economist podcast for Friday, September 16, 2016 at www.CitizenEcon.com. I'm Howard Hyde.
Yesterday at the Economic Club of New York, Donald Trump laid out one of the key goals of his administration, which is to achieve 4% or better annual economic growth. Some commentators have dismissed this as "empty," "abstract," or "boring". Let's admit that it doesn't have the pizzazz of sending a man to the moon and back, but it is in fact precisely the kind of goal that needs to be proposed so that all Americans may prosper again after a lost decade of stagnation.
Let me see if I can make this less empty and more exciting for you. If you are the median household in America, a decade ago you were earning $60,000 per year and now you are earning only $56,000, thank you Obamanomics and the 1 to 2 percent anemic growth rates that we have been suffering through. If we could have had 4% economic growth, and you could have personally tapped into just half of that, increasing your income by 2 percent per year, you would be making over $73,000 per year today instead of the $56,000 that you are. If you made $30K ten years ago, your income today would be over $36K instead of the $28K that it is. And if you made $120K ten years ago, you could be making $145K today instead of the $112K that you are. And that doesn't even take into account the explosion of innovation and quality of products and services that would occur under a liberated economy.
That is the power of compound interest, and that is the supreme importance of economic growth; it enables general prosperity. It permits YOU, the citizen of a free nation, to create, earn and acquire your means of survival in the modern world. As such, it is a moral imperative.
And it's not like it's rocket science how to achieve this; it is largely a matter of allowing it to happen, as opposed to what we have been doing. The massive regimen of taxes and regulations, by which the government consumes 40% of the output of the economy while compelling productive Americans to spend billions of hours each year on lawyers and accountants, figuring out how to comply with millions of pages of rules, failing which they may be taxed more, fined or imprisoned, sits like a dead weight upon economic growth. It is as if we were all farmers, and the government sends a plague of locusts to destroy a quarter of our crop each year, and then they burn another quarter of it for good measure.
The way to achieve 4% or better growth is to take the government shackles off the American people, especially small-business entrepreneurs. It requires massively repealing and sunsetting laws, taxes and regulations that do not derive from government's core legitimate role of keeping the nation secure from foreign threats, and preventing and punishing murder, assault, robbery, theft, fraud, rape, persecution and conspiracy.
Liberals and progressives are in fact opposed to economic growth and will do almost anything to crush it, because in their warped world view, growth just means bigger smokestacks belching planet-killing greenhouse gasses and generating wealth that they the progressives don't command and control.
Framing the debate in terms of a simple, legitimate and measurable goal also has the virtue of giving an opening to those conservatives who are still on the fence about Trump. For all of his faults, Trump has demonstrated that he is willing and able to surround himself with world-class advisors in all of the key functions of his administration; men and women whom he knows and acknowledges have far more expertise than he ever will in specific areas. Come next February, any policy that Trump suggests which is likely to be counter-productive to his stated goals upon which we agree, will be called out by those experts and opposed by the conservative Congress.
So no, this is anything BUT "empty," "abstract," or "boring". This is a moonshot, and it is SMART: Simple, Measurable, Achievable, Relevant and Timebound.
You're listening to the Citizen Economist podcast at www.CitizenEcon.com. I'm Howard Hyde. Thanks for listening.
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