I am not an economist. That’s a good thing because Econ 101 was not a strength for me as a freshman at the Virginia Military Institute in 1969. Most of my physical and intellectual energies were devoted to surviving the “ratline” each day, not economics. But I digress. Despite suboptimal classroom performance, I’ve learned a few things over the course of my lifetime. At 74, I can point to a few observations I have about the current economy, the challenges we face, and what we can do to address them.
Our obvious problem is that we’ve spent ourselves into the problem. Our national debt is now $38 trillion—an unspeakable travesty—that not only threatens our economy, but also the future of our children and grandchildren. Underpinning that irresponsibility is an addiction to the idea that we can spend our way to utopia. However, spiraling spending upwards is actually boring a budgetary hole downward. In essence, if we want to emerge from this fiscal self-destruction, we must stop digging our economic grave.
Our trade imbalance in the past years was indeed exacerbated by the loss of manufacturing jobs overseas, as well as the stringent taxation and regulatory environment that we have imposed on ourselves. We excelled at beating our economy down with our own hammer in hand as foreign nations took advantage of our willingness to ship our jobs to them. Coupled with our love for inexpensive things, we grew quite tolerant of cheap overseas labor, making our trips to Costco, Walmart, and Amazon more enjoyable. Recently, an Army colleague reminded me of a saying from a German friend who wryly observed, “America is the land of unnecessary things.” Indeed. It’s time to get back to what is necessary.
As a result of all this and other factors, we continue to battle inflation, low job creation, and persistently high interest rates. What must our leaders do to address the so-called “affordability” problem? Here are some thoughts.
First, stop adding fuel to the fire. That means hit the delete button on the massive social welfare programs that are impoverishing America while encouraging a dependency that devalues work. Massive spending in the wake of the COVID-19 pandemic led to a spike in inflation to 9 percent, a problem we are still grappling with today. Besides, you cannot spend yourself into prosperity, only debt.
Second, end the political lust to regulate every aspect of our economy. Consider the cost of housing in America today. Jim Tobin, president and CEO of the National Association of Home Builders, notes that the cost of regulations alone is a significant factor in our-of-reach housing costs. Fully 24 percent—roughly $94,000 of the price of a single-family home—is embedded in local, state, and federal regulations. Stop the insanity. If a regulation is essential to guard our liberty or health, then it is fine. Otherwise, don’t add more regulations.
Third, the one thing I have learned in the classroom and over the last 50 years is that the free-market concept works, while the “free stuff” mentality doesn’t. A government big enough to give you everything you want is also big enough to seize everything you have. (New Yorkers will soon become aware of that.) Let’s replace our “rob the rich to pay the poor” Robin Hood economy with a “roll-up-your-sleeves” free enterprise one that rewards innovation, hard work, and risk-taking to secure the American dream. We don’t need a massive food stamp program. We need more farmers, food producers, and grocers. (Think supply and demand and a workforce to feed everyone.)
Fourth, sharply reduce taxation in America and share the responsibility for all citizens to have “skin in the game.” That means a flat tax that everyone pays, regardless of their income level, rich or poor. Nor deductions. No gimmicks. No excuses. It must be “pay to play.” In doing so, people will “pay” far more attention to how the government “plays” with their money.
Finally, banish the filibuster rule in the US Senate that artificially raises the threshold to 60 votes for legislation that should pass with a simple majority. It’s hard for me to propose that, as there are unintended consequences to doing so. Our closely divided, highly partisan government can do a lot of bad with a simple majority in the Senate. However, we have a limited time to address our economic problems, and the filibuster rule almost guarantees that we will fail to do so.
Congress, currently controlled by individuals inclined toward the ideas above, could quickly shift into the hands of those who would oppose these reforms. So, it is time to strike when the metal is hot. Addressing the economic challenges we face is of immediate concern. Waiting for the Democrats to inevitably end the filibuster will be too late.
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