It's common knowledge that government policies have a great impact on whether the U.S. economy is good or bad.
These policies also play a factor in either encouraging or discouraging private sector job creation and wages that enable families to maintain a decent standard of living.
In a recent column, I noted that bad government policies ‒ through excessive stimulus spending during the Biden years ‒ were a major contributing factor to the inflation that has robbed families of purchasing power in recent years.
Stated another way, these policies led us into the affordability crisis that we now hear so much about, and it will take good policies to lead us out of this mess.
Based on virtually everything I've read I've read concerning economics, combined with over 50 years of experience in business, I firmly believe that the key to the success for the U.S. economy is a strong private sector in which business thrives.
When we have government policies in place that help to attain these thriving conditions, businesses generally pour capital back into their operations in order to expand.
This leads to more available jobs and increased competition in the job market, which results in rising wages.
These conditions also lead to more tax revenue for government, which would make you think that government would always want to promote such conditions.
Perhaps government officials do want this. If so, their policies often fail to achieve this goal. Thankfully, President Trump understands what drives business and our economy, and he's implementing policies that foster growth.
The following are a few of the policies that his administration is promoting:
Pro-Growth Tax Reforms:
Reductions in corporate and business tax rates, especially, incentivize private investment and expansion. By lowering the cost of capital, these policies encourage firms to invest in new equipment, technology, and hiring, which boosts productivity and creates jobs.
President Trump was successful with tax policy in his first term, and he has already signed a bill in this term to expand and make those tax policies permanent.
Evidence from the 2017 Tax Cuts and Jobs Act shows that the permanent reduction in the corporate tax rate to 21% supported increased business investment and contributed to higher wages, with annual wages rising in subsequent years as firms expanded.
Such reforms make the U.S. more attractive for domestic and foreign investment, leading private companies to hire more workers and compete for talent through better compensation.
Targeted Regulatory Reform and Deregulation:
Reform and deregulation reduce compliance burdens on businesses, freeing resources for growth and employment.
Excessive regulations can raise costs and deter hiring, while thoughtful reforms (such as streamlining permitting or reducing unnecessary rules) lower entry barriers and encourage entrepreneurship.
Studies indicate that deregulation in sectors like trucking and railroads have historically led to increased employment and efficiency in those industries, with firms expanding operations and creating more jobs under reduced regulatory constraints.
By easing burdens without compromising safety or environmental standards, good policies enable private firms to direct capital toward productive activities like hiring and wage increases.
Tariffs:
From President Trump's perspective, are predominantly about bringing manufacturing jobs back to the United States.
One thing that became clear in the immediate aftermath of COVID-19 was our overreliance on goods and services produced elsewhere.
We all consistently heard that things we ordered, including crucial parts to repair machines, were delayed due to supply chain issues.
The real problem was that those items were not produced here.
They were produced elsewhere, and the "issues" were often transportation related.
Tariffs are a major tool to help restore American jobs and ensure that we don't face those supply chain issues again.
There is something else we can do to help both businesses and every American citizen, and that is to focus on saving the main Social Security Trust Fund.
Because of the great number of baby boomers retiring, the Trust Fund ‒ which contains surpluses from prior years ‒ will be exhausted in the 2032-33 timeframe.
If that happens, the projected 80 million Social Security recipients at that time will take a cut in benefits of approximately 23%.
This would be devastating to these recipients and their families, but also to businesses and our economy.
Social Security currently accounts for about $2.6 trillion of economic activity annually. Imagine the pain this would cause in all communities if roughly a quarter of this activity disappeared overnight.
The good news is that we Americans can play our part by making sure that Republicans hold the U.S. House and U.S. Senate during the midterm election cycle.
By doing this, we can ensure that Congress will focus on fixing problems instead of investigations and impeachment.
This will also give the president the backing to appoint a bipartisan commission to make recommendations to fix Social Security, similar to what President Reagan did in the early 1980s.
This president has repeatedly vowed to protect Social Security, and he understands this means shoring up the Trust Fund. It is up to us to make sure he has a Congress that will support these efforts.
For more information, please visit: www.JoeFromTexas.com.
Joe from Texas is a family man with children, grandchildren, and great grandchildren. He's experienced tremendous success and lived the American Dream. His beliefs are both straightforward and deeply held. He believes in God, his family, and the United States of America. Read more Joe Penland, Sr. Insider articles Click Here Now.
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