It’s no surprise that the government policy decisions made over the past couple of years have created many economic issues that are weighing heavily on the backbone of America. From rocketing inflation, including energy, to nearly 11 million jobs remaining unfilled and supply chain issues, 2022 is shaping up to be a disaster economically.
There are a number of things that can be done to fix — and frankly save — the economy. However, they stand in opposition to the big-government policies that Biden and his Democratic partners love. As we always should prioritize a healthy economy for all over politics, here are some suggestions, should the administration choose to accept them, that would have a tremendously positive economic impact.
Return America’s energy independence
Among Biden’s first actions in office were suspending oil and gas leases and withdrawing the permit for the Keystone XL pipeline. This has moved the U.S. from being energy independent and the leading producer of petroleum and natural gas in the world to begging OPEC for price relief. Oil in recent weeks has been over $90 a barrel, and gas prices to the consumer are steadily creeping up, weighing on overall inflation.
Reversing these moves and encouraging the United States' energy independence would be a huge boost to the economy and eventually help depress the energy component of inflation. While Biden and the left are pushing green initiatives, they could and should pursue any of those in parallel with returning us to traditional energy independence. While the entire world still depends largely on fossil fuels, having a leadership role in their production makes green sense — the U.S. is in the best position to ensure production is done in a clean and environmentally friendly manner vs. some of the other leading producers that will continue to produce regardless of what America does.
Shrink the size of government, including government jobs
The size of government, and its spending, is out of control. We have been running multitrillion-dollar deficits, adding to what is now $30 trillion in cumulative debt.
The U.S. government has more than 2 million people working for it, plus contractors. This gives them outsized influence, as well as a big bill that demands more money printing and policies that increase inflation and create a hidden tax on the average American.
Now would be the ideal time to shrink the government size, across the board. With almost 11 million jobs open and available, the private market can not only absorb these positions, but it would have the secondary effect of helping to repair supply chains that are in disarray due to lack of labor.
This type of action would have enormous positive consequences, despite it being unlikely to happen, particularly via the Biden administration.
Make it easier to hire
Another way to help solve some of the broader labor and supply chain issues would be to help make it easier to hire. Right now, out of around 31.7 million small businesses in the U.S., only about 6 million have employees. A substantial reason for that gap is that it is so difficult and expensive to hire your first employee as a business. It completely changes your cost structure, beyond just salary, to include additional taxes, costs like insurance, and other factors that change even your retirement plan options.
Additionally, there are strict rules about who can be an employee and who can be a contractor. The IRS has rigid definitions, and depending on the way someone works, they may be considered an employee even if you treat them like a contractor.
Instead of making it easier to bring on contractors, more regulation has popped up to try to interfere in the agreement between a worker and a company to make more people legally employees, despite the desire by the parties to use flexible contractor relationships.
Making it easier for people to say, “My labor, my choice” and for small businesses to be able to hire or contract without it being a burden on either party would be bold and help solve the structural labor force issues, plus expand the economy in an authentic way (via productivity vs. money printing and inflation).
However, given that the Biden administration supports the PRO Act, legislation that has passed the House, which more stringently pushes unions and seeks to limit, not expand, the definition of contractors, that is also unlikely to happen.
Rein in the Federal Reserve
While the Fed is supposed to be independent, let’s be honest: That train left the station a long time ago. The Fed's actions over the years, but particularly since the Great Recession financial crisis and accelerating in the past two years, have been incredibly damaging, enabling a historic transfer of wealth from Main Street to Wall Street and the already wealthy and well connected.
Congress gives the Fed its powers, and the Biden administration should be advocating for Congress to rein in the Fed so that it doesn’t do more damage in the short or long term.
Again, the likelihood is small — the big-spending Democrat agenda needs financing, and the Fed’s willingness to monetize our debt and suppress interest rates so that more of our tax dollars aren’t going towards paying interest on the $30 trillion in national debt already racked up is doing the dirty work for big government.
These ideas are big and bold and inconsistent with basically every policy the Biden administration has. Should the administration have the fortitude to go in a different direction, the economy would be bolstered, as would, likely, Biden’s poll numbers.