What ails the United States? It’s the economy and government

Raymond Keating
Raymond Keating

So, what ails the good old U.S. of A.?

According to the results of a recent Gallup poll, Americans point to the economy and government.

When asked what’s the most important problem facing America today and leaving it as an open-ended question, 28 percent of those who responded identified the economy or jobs, while 17 percent said the economy in general and 11 percent pointed to unemployment and jobs Next in line was dissatisfaction with government at 15 percent.

All of the other answers were in single digits.

Unfortunately, from this particular poll we can’t identify what policies Americans favor that they think would provide a better foundation for economic, income and employment growth.

However, we know what policies have been imposed since the economy started to go south in late December 2007, and its subsequent struggle through a brutal recession and miserable recovery. Namely, it’s been about higher taxes, a vast increase in regulation, expanded government intervention in the market, increased government spending and debt, a lack of U.S. leadership in terms of reducing barriers to trade and extremely loose monetary policy.

Such a policy agenda reduces incentives for entrepreneurship and investing; raises costs of doing business and hiring; limits economic opportunity for entrepreneurs, businesses and workers; and creates uncertainty that further restricts economic, income and employment growth. Indeed, the policy agenda of the past eight-plus years amounts to a recipe for inflicting serious damage on the economy. As a result, we’re stuck in a recovery in which real economic growth is half of what it should be.

The remedy, then, is equally clear. That is, reverse cost. By implementing tax and regulatory relief, reining in government spending and other forms of intervention, lowering government-imposed barriers to international trade and choosing sound money focused on price stability, incentives for private-sector risk taking would be enhanced, costs would be reduced, uncertainty pared back and opportunities expanded.

The result? Moving toward robust economic, income, small business and job growth.

It’s been quite some time since the U.S. has implemented pro-growth policies. And one can argue the longer it takes to move in the right policy direction, the harder it will be to do so — that is, the more difficult it will be to roll back the many misguided, costly policies that now hold sway.

There’s some truth in these concerns, but all it takes is the political will to make it happen. Apparently, many Americans are ready for a new path on the economy and government.