Before the arrival of the COVID-19 pandemic, Americans were experiencing the strongest economy in a generation that showed no signs of letting up. After several years of slow recovery following the financial crisis of 2007-09, economic growth and labor market stabilization in America picked up during the 2017-19 period, as workers stepped away from the workforce in response to rising wages and opportunities. strong employment. .
The period of economic vitality from 2017 until the pandemic was a fluke, and was not indicative of policies undertaken by the Obama administration. Many people may not remember that the economic expansion was slowing significantly in 2016, resulting in growth of less than 1.4% between mid-2015 and mid-2016. Some people at the time were we on the verge of recession. It took a bold change in policy vision from 2017-2019 to help the sharp recovery in economic success that followed. In particular, the warm-but-not-too-hot economy during those years was the product of America First and pro-growth policies that emphasized reducing burdensome regulations, achieving energy independence through barriers to production remove energy, reform the tax code to make America the world. competitive, promoting work, providing tax relief for hard-working Americans, and trade policies that encouraged domestic production and protected American workers against unfair practices abroad.
The data speaks for itself. Our nation’s output grew at an average annual rate of 2.6% from 2017 to 2019; the unemployment rate fell to 3.5%, with prime-age labor force participation rising after years of decline, poverty is at an all-time low. This prosperity was disrupted by the COVID-19 pandemic, and the economy contracted in the first half of 2020. However, the economy expanded further in the second half of the year, with GDP almost back on track end of 2020 and unemployment. rate falling from 12.4% in April 2020 to just 6.4% in January 2021 and on its way lower. Inflation, by the way, was still below 2% in January 2021.
That was the economy the Biden administration inherited and then screwed up by enacting an inflationary, anti-work and anti-energy agenda on the American people. On the first day, President Biden signed executive orders that implemented his promise to “end fossil fuels.” He signed the so-called “American Rescue Plan,” which pumped another $1.9 trillion into an already cash-strapped and supply-strapped economy. He pursued big government inflationary socialism through the ironically named Anti-Inflation Act.
Add to that a tax and regulatory environment that has curtailed domestic production and reckless spending that has created the highest debt-to-GDP ratio we’ve seen since World War II, and we’re seeing prices rise at the fastest pace for 40 years. Big government socialism always fails, and we must once again put the American people at the center of our economy.
That means giving power back to the people. From day one, newly elected leaders must:
- Unleash America’s energy. This is achieved by allowing reform, increasing drilling leases on federal lands, allowing pipelines, licensing new refineries, and eliminating regulations that seek to restrict energy independence.
- Let the American people keep more of their own money. Making the Tax Cuts and Jobs Act permanent will provide much-needed certainty for businesses looking to invest and should provide a baseline for further growth-enhancing tax reform.
- Stop out of control spending. Both inflation and ballooning federal debt are caused by overspending—not inadequate tax revenue, which is at an all-time high.
- Targeting government aid to the most vulnerable. Americans are a compassionate people, but they also understand the value of hard work and responsibility. Especially given the ongoing labor shortage, we need to promote paychecks over government checks by removing disincentives to work for able-bodied prime-age adults.
- Transferring the power back from Washington, DC, to Main Street. The Biden Administration has contributed 193 million hours of paperwork to the American people. Complying with these additional bureaucratic rules requires nearly 100,000 full-time workers—a burden small businesses, in particular, cannot bear.
By implementing these policies, we can return to a confident, secure and prosperous America where strong, private-sector-led growth, the world’s largest economy, works for all Americans. Lower energy prices, a growing economy, rising paychecks, and a secure retirement are all within reach again if we return to America First policies that have already been shown to work. They will work again.
Michael Faulkender is a senior fellow at the America First Policy Institute and professor of finance at the University of Maryland. Before that, he was assistant Treasury Secretary for economic policy (2019–21).