Wednesday, November 16, 2016

The Entrepreneurial Way to 4% Growth

Trump Should Fix the Business Climate So a Million Americans a Year Can Start Companies

Consider the economic situation that President-elect Trump is inheriting. Despite the addition of 161,000 jobs in October, the labor-force participation rate fell to its second lowest level in nearly 40 years, according to the St. Louis Federal Reserve. More people have joined the ranks of the chronically unemployed, slipping into poverty at alarming rates as their skills decay and dependency on public assistance grows. Considering population growth, America needs at least 325,000 new jobs every month to stanch the growing numbers of discouraged workers, according to the Bureau of Labor Statistics.  Merely bringing back factories from overseas will not solve this problem. Technology has made every factory more productive. Fewer workers make more goods no matter where they’re located. At the same time, fewer U.S. businesses are being started. New firms are the country’s principal generator of new jobs. What can President Trump do to encourage more entrepreneurship? First, increase economic growth. More businesses start when GDP expands at 4% rather than 2%. Existing businesses look for new markets, often turning to young companies for innovative ideas. [more...]

The Prospects of a Trump Economy

If Mr. Trump runs this country like he runs his business, which he intends to do, our economy is in for a HUGE treat. He promises to lower corporate taxes and individual tax rates, thereby boosting profits and helping business owners create more jobs. Couple this with Trump’s plan to slash regulations and we’ll likely see very fast growth in the short run.  One of the hottest items on Trump’s agenda is trade. If he follows through on trade and imposes tariffs on foreign goods, the U.S. could see a great deal of money coming in from abroad as well as jobs returning to the US. The list of what-ifs and possible policy actions goes on, but the most important thing to understand is that for Trump to be successful in growing the economy, he must focus on job creation, civic investment, and shrinking the size of the government. The prospects of a Trump economy are encouraging. No government in history has been as efficient as the private sector. [more...]