While I am not running for office, like most of us, I am concerned about the direction of our country. Like most readers of Augusta Business Daily, I am most concerned with how this direction impacts business and our country’s economy. In a little over three weeks, our two presidential candidates are scheduled to participate in the first of two debates prior to the election. Hopefully, this debate will enlighten us on how each candidate plans to address the issues that impact us the most. Unfortunately, I am not too hopeful. So far, one candidate tells us the other guy is a threat to democracy and the other candidate tells us the other guy is senile; while each of them indicates the other is crooked. Rather than attack the other candidate, I would like to hear what they would do to positively impact our economy and our business environment. In today’s column, I am going to present a “platform” of what business needs most from our federal government with the hope that maybe one or both of our candidates might be considering elements of it.
- Reduce the Federal Debt and Reform Entitlements: The ticking time bomb for our economy, and therefore business, is our federal debt. At the end of September 2023, our gross federal debt reached $33 trillion of which over $26 trillion is debt held by the public, equal to about 98% of our Gross Domestic Product (GDP). As the debt increases, more and more of the federal budget must be used to service the debt and the interest rate needed to raise the funds to service the debt continues to rise. All of this is bad news for our economy, including significantly increasing levels of inflation and potentially a default which would reverberate throughout our economy and that of the world. In addition to reducing debt, our leaders also need to address future deficiencies in our major entitlement programs such as Social Security and Medicare. Rather than fearmongering that riles up seniors, real reform which protects the solvency of these programs is necessary. The best news is that the wheel does not have to be reinvented. Great work was done by the National Commission on Fiscal Responsibility and Reform (more widely known as Simpson-Bowles) in 2010 to address these issues and that work would be a great starting point today. If the recommendations of Simpson-Bowles were adopted back then, we would not be in such a dire situation today. The left will cry about budget cuts and the right will cry about taxes, but we need to disregard the crying and save the economic future of our country.
- Immigration: Immigration is much more nuanced than either side would have you believe, but in my oversimplified platform on immigration, we need to increase legal immigration and decrease illegal immigration to bolster the future of our economy. With our shrinking birth rates, we need immigration to ensure we have enough workers to keep our economy growing. This includes the very bright to support our information economy and the hard workers willing to do the important labor some of our own citizens are less willing to do. Such growth in our workforce will also improve the contributions to our entitlement programs. At the same time, illegal immigration needs to be stemmed as illegal immigrants cost the country conservatively about $150 billion per year.
- No Tariffs / Free Markets: Both presidential candidates appear to be fans of tariffs, particularly since tariffs are a tool of populism. They sound like a good idea to be supporting American business. However, historically, tariffs have been shown to be bad both for inflation and the economy, in general. During the last 10 years, tariffs have been shown to reduce GDP, reduce long-term wages, and reduce long-term employment. By reducing competition in the marketplace, tariffs also increase prices (i.e., inflation). This country has been at its best when it competes in free markets, not those dictated by tariffs, regulation, and government selection of “winners and losers” (e.g., electric vehicles).
- National Service: If you have followed my writings over the years both in the ABD and in other venues, you know that I am an enthusiastic proponent of two years of mandatory national service for all 18-year-olds. Such a program would provide many benefits to our economy and our society. The participants would enable our country to meet the critical needs of ensuring national security, upgrading our physical infrastructure, providing child care and elder care freeing others to work outside the home, supplementing our overtaxed education and health care systems, and supporting our local communities. The skill sets and lessons learned by the participants would enable them to better match their capabilities with the needs of the marketplace. Training and education in trades and other important industries would provide future opportunities. As participants conclude their service, they would come out more mature and focused and better able to contribute to society. Such “gap years” that would be created by this service would result in more students graduating college more quickly. Service would force more of our citizens to work more closely with those who are different from them. Exposure to various types of people would likely reduce the polarization in our country and make it more unified. The State of Maryland has already implemented a one-year, optional program which could be seen as a pilot for a national program.
While I do not pretend to have the ability nor the experience to run for President of the United States, I do care greatly about this country and pray for its future. As we determine who might lead for the next four years, let us hope that the economic future is high on the agenda of each candidate.
