Someone asked me at a briefing earlier today what I would say in a State of the Union. So, my answer was pretty simple and very clear: I'd slash spending, cut tax rates, deregulate and have the Fed maintain honest money. That's right. That would be my view.
If we had those kinds of policies, we'd be growing the economy about 3.5% a year, like we did in the post-World War II period for 50 years, instead of the 1.5% a year trend we’ve been on for three decades. Less spending, lower taxes, limit regs, sound money, equals prosperity. That's right.
Nice and simple. But I guess getting there is politically a little harder.
It doesn't matter to me which political party offered to be stewards of a new economic prosperity, but I'd say the chances are, nowadays, the Republicans have a higher probability than the Democrats and unfortunately President Biden, who will give the State of the Union speech tonight, has virtually no probability.
BIDEN TO REVIVE PUSH FOR WEALTH TAX IN STATE OF THE UNION ADDRESS
Mr. Biden will defend his economic stewardship, and it's going to sound a lot different than what I just outlined. He may even tell a lot of untruths during the speech. I sincerely hope not, but that's my concern.
On the other hand, Americans are very smart and polls across the board show they’re not buying Mr. Biden's economic prowess. Here's one reason why: Just in the last four quarters alone, real wages for blue-collar workers have fallen 1.4%. That’s just in the past year. That's the worst since 2011.
Since Joe Biden became president, the cost of living has gone up 14%. In terms of real dollars, working folks are losing about $15 a week, or $60 a month. The 14% hike in the cost of living is the worst since Jimmy Carter.
In this decline, real wages have been the soft underbelly of the Biden economy since Day 1 because of the over-spending and the over-regulating and the war on fossil fuels and the taxing and the inflation. Mr. Biden has never been able to escape the public's disapproval.
We will see tonight if he is willing to compromise with Republican House Speaker Kevin McCarthy on a debt ceiling increase that includes structural spending reductions. The new speaker gave an excellent State of the Union "prebuttal," which, among other things, emphasizes the need for work requirements for social benefit programs.
Over the last several years, as many as 7 million able-bodied people have left the workforce because government benefits pay more than the private sector. This is not only bad in economic terms, it undermines the dignity of work, and to some extent it cuts into the very soul of America.
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Mr. Biden is probably going to call for higher taxes on successful earners, more redistributionary policies and more disincentives to work, save, invest, start new businesses and grow the economy. The tax hikes will be dead on arrival. It’s all a pity. I don't actually think he would subscribe to my world view of the optimal State of the Union message.
Oh well! We'll wait until next year, or maybe the year after that. I'm a patient man. I know what works. Save America. Stop the spending. Go back to work.
