I spend a great amount of time studying history, analyzing policymakers, and I dare to say even criticizing the performance of our elected leaders. Routinely, organizations will invite me to speak about the economy and American politics, and I must admit that I get a sense of fulfillment from sharing knowledge and discussing ideas that will improve our country. Recently, I was approached by a young lady after giving a talk about the economy, and she had clearly grown frustrated with my plethora of critiques for the current administration. She challenged me to offer my own economic recovery plan, so of course, I had to follow through.
The year is 2020 and the Republican from North Carolina has just become the 45th President of the United States …
Education
Improving the education system is the single most important action that government can take to grow our economy, stimulate private sector jobs, and develop a prosperous nation. Our society has moved dramatically away from an economy that is powered by agriculture and manufacturing, which means that workers must have the necessary experience to compete for the skilled and highly educated jobs of the future.
The k-12 education system in America is inefficient and largely ineffective, which requires policymakers to make tough decisions about reform. We have created a system with far too much bureaucracy, where the federal government places mandates upon the state, and then states place further controls on local school boards. The federal government should be simply focused on maintaining a national standard, so that boys and girls in North Carolina are just as educated as boys and girls in California.
Moreover, the role of state government should be reduced, and local school boards should have full autonomy in how they operate their schools, as long as national standards are not being circumvented. The teachers unions must come to realize that the success of our children is the most important outcome when it comes to education, which requires compensation that is based on merit and performance, not tenure.
We must work carefully with our graduating high school seniors to help them make decisions on the next phase in their life. Several decades ago, we wrongfully promoted the message that everyone must go to a four-year college and that propaganda has resulted in a deficit of skilled labor and a misallocation of resources. Some college graduates never utilize their degrees because they were never originally committed to the idea. We have a network of community colleges that stand ready to train the workers of the future in computer technology, high-skilled manufacturing, and biotechnology – these are the industries of the future.
Economic Development
We must repeal the Bush era Sarbanes-Oxley accounting rules, which will provide immediate relief to our small and medium-sized businesses. We must repeal the Obama era Dodd-Frank financial regulation, which will lessen burdensome regulations placed on the financial sector and allow them to better serve consumer and business customers. We must repeal ObamaCare, which does little to bend the exploding cost curve in healthcare, and replace with reforms that will not only focus on access to health insurance, but also will bring down healthcare costs through enhanced prevention, policy options, and tort reform.
The current tax system is too complicated and rife with loopholes that unevenly benefit taxpayers. We should flatten tax rates by removing all loopholes, credits, and subsidies – for example tax carve outs for mortgage interest, municipal bonds, child credits, and energy subsidies would all be gone. In addition, we would end the double tax on capital gains and dividends, by expunging them from the tax code along with the Alternative Minimum Tax. The corporate tax rate would be lowered from 35% (the highest in the world), and American companies would be taxed on a territorial system that would no longer incentivize firms to leave capital parked in foreign countries.
We must develop a credible immigration strategy that encourages foreign graduates of American colleges to remain in our country as entrepreneurs and create jobs. The best colleges in the world are located in the United States and international students travel here to receive a world class education, but we lose those graduates because we lack a sound immigration policy.
We must rein in overzealous bureaucrats at the Environmental Protection Agency, Food and Drug Administration, Justice Department, and the National Labor Relations Board. These agencies serve as “job killers” with overly burdensome regulations and they often block companies from expanding, which further drives American companies to offshore jobs. We will work with the Department of Energy to develop a comprehensive energy plan that recognizes coal supplies our baseload, but we will look at innovative ways to integrate natural gas, wind, and solar, while expanding domestic drilling.
Fiscal Policy
There are large disagreements about the severity of America’s fiscal situation, but we understand that America must clean up its house if we are to meet our future promises. Between 1960-2008, the federal budget hovered in the range of 17.7% – 21.8% of GDP; it was 18.5% during the Bush Administration (despite tax cuts and two ongoing wars). Even during 2008 when the economy contracted severely, federal tax revenue still came in around 17.5%. The size of the federal budget reached 25% of GDP during the Obama Administration, so we must reduce federal outlays to meet the historic reality – public spending should not surpass 18%-20% of GDP. Reduced spending combined with policies that stimulate economic growth and tax receipts will erase our never-ending budget deficits – while easing debt-to-GDP from 97% to a more comfortable range of 55%-60%.
There is absolutely no way to rein in federal spending and the long-term public debt without reforming entitlement programs such as Social Security, Medicare, and Medicaid. LBJ projected that Medicare’s budget would reach $12 billion in 1990, but instead the budget hit $110 billion – a gross miscalculation to say the least. Today, Social Security, Medicare, and Medicaid make up 60% of the federal budget and growing. Interest on the national debt chews up another 10%, spending on national defense gobbles up around 20%, and then federal agencies require around 15% to operate. Therefore, it is impossible to bend the rising cost curve on government expenditures without restructuring America’s most treasured programs.
I hope you have enjoyed reviewing my plan and read it with some sense of humor. However, the reality is that America is facing unprecedented challenges, but not unconquerable obstacles. We face nothing that cannot be solved or overcome, but our struggles require leadership, vision, and a plan.
