American Elephants

The Trump Agenda for Achieving 3% Economic Growth by The Elephant's Child

The overarching goal of the Trump administration is to Make America Great Again, which means promoting MAGAnomics—sustained 3% economic growth. That’s Mick Mulvaney, director of the Office of Management and Budget, writing in the Wall Street Journal on Wednesday.

For most of our nation’s modern history, a healthy American economy meant one that grew at roughly 3.5%. That was the average growth rate between the late 1940s and 2007. Since then, it has hardly topped 2%.

The difference between those two growth rates is staggering. If the American economy had grown at only 2% between the end of World War II and 2000, average household income would have been roughly $26,000 instead of $50,000.

Over the next 10 years, 3% growth instead of 2% will yield a nominal gross domestic product that is $16 trillion larger, federal government revenues $2.9 trillion greater, and wages and salaries of American workers $7 trillion higher.

What’s involved? Tax Reform: Encouraging capital investment will boost productivity. When businesses have more money to invest in plants and equipment, it means hiring more people who produce more. Lower tax rates reduce the cost of capital and thus ignite economic growth. 70% of business income goes to wages, so the benefits flow to workers as well.

Controlling unnecessary regulation: Regulations often turn out to be far more burdensome than the regulators realized, and they increase the cost of doing business. The EPA has been extravagant with overzealous environmental regulations and have pushed many businesses overseas. Realistic cost-benefit analysis helps to protect jobs as well as keeping the environment.

Welfare reform: Many people who could be working are staying home. We need them to go back to work, but the welfare system creates disincentives for those who seek work. Welfare reform will ensure that those who are truly in need of help will get it, but does not encourage people to stay home.

Smart energy strategy: Cheaper, cleaner, more abundant energy will increase investment and employment across many industries. Reliable supplies and stable prices will reduce uncertainty especially in the manufacturing sector and reduce the risks of building new plants and hiring more workers.

Fair Trade is already beginning to work. Government spending restraint is currently visible in the White House budget, and has the entire government at work figuring out how to accomplish more with less waste and more efficiency. Private investment allocates capital more efficiently than government. Rebuilding America’s infrastructure will create more jobs, but environmental restrictions and bureaucratic red tape can play hob with the best intentions.

The Founders may never have expected in their wildest dreams the enormous bureaucracy of our nation’s capitol, but they were very familiar with human nature and its flaws—and that doesn’t change. The Constitution was intended to slow things down, to require more consideration and more responsibility. MAGAnomics is intended to set the stage for the greatest revival of the economy since the early 1980s. It will remind people what a great America means.

Sounds like a good plan to me.

3 Comments so far
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Here’s a thought about government spending. Regardless of how efficient it can be made, there is one area that has rarely been considered and should have been. It has been a long standing action by Congress to spread federal spending across the country such as military and NASA work. While at times this leads to inefficiency it does tend to bring back the money the federal government has confiscated in taxation from those various states.

The GSA has recently cancelled the move of the FBI headquarters from DC to Maryland due to a lack of funding from Congress. The DC, Maryland and Northern Virginia areas have been overly salted with federal spending in proportion to the tax revenue collected from same. Would it not be a fairer allocation if instead the FBI headquarters were move to say … Detroit? an economically blighted area ? In this age of the internet, there is no reason to concentrate agencies physical presence in DC. It’s time to distribute the federal government.

It certainly would cut down on traffic congestion in DC.


Comment by dscott

I’m not sure that the words government spending and efficient should appear in the same paragraph. I know that our representatives in Washington feel extremely important, but they are only ordinary fallible people. We need to become more selective.

One of the unrecognized efforts of the previous administration was to increase the population in selected districts to affect the census numbers, and thus the numbers of representatives, because illegals get counted and add to the numbers. Is that the reason for sanctuary cities? The big reliably leftist cities on the coasts are becoming too expensive for their residents, too crime ridden. Should we be increasing population across the rest of the country–flyover country, where the deplorables live?

You suggest moving federal agencies. How about locating new business? Others are suggesting that we sell off “the infrastructure” — highways and bridges, to private industry. We’re not accustomed to toll roads on the West Coast.
I’m inclined to agree with you on redistributing some of the government. DC has become way too incestuous.


Comment by The Elephant's Child

Following up on your comment regarding increasing population in selected districts. Yes, that’s why Obama brought the 2010 Census into the White House. Trump’s actions on immigration enforcement will tend to reduce the inflated census numbers in sanctuary cities. They (Democrats) are doing this for two reasons:
1) increase their federal share of funds allocated to the States. 2) increase their numbers in the House of Representatives due to apportionment. Approx. 1 per 747k based on 325 million divided by 435 Reps.

California has at least 4 more Reps than they are entitled due to illegal aliens counted in the Census which in effect has disenfranchised the smaller states of their Reps. Same for New York, Florida and Texas.

IF Trump is successful in moving out most of the illegals by 2020, the power of the Democrat Party in the Electoral College is lessened. Meaning any Democrat presidential candidate is going to have a tough time getting elected president. This is on top of knocking down their numbers in the House from fewer reliable Democrat districts.

Al Franken, senator of Minnesota got into office winning by 312 votes using just convicted felons who weren’t allowed to vote. You don’t need millions of illegals to steal an election, you just need enough on the order of 1000s or less to turn an election in various districts. Removing the millions of illegals (even if only 10% of them vote) will make a major change in most every Democrat controlled state like Virginia.


Comment by dscott

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