America First policies will revitalize our economy

Before the arrival of the COVID-19 pandemic, Americans were experiencing the strongest economy in a generation that was showing no signs of letting up. After several years of slow recovery following the 2007–09 financial crisis, Americans during the 2017–19 period experienced an uptick in economic growth and a turnaround in the labor market, with workers coming off the sidelines in response to rising wages and robust job opportunities. 

The period of economic vitality from 2017 until the pandemic was no mere happenstance, nor was it the vestige of policies undertaken by the Obama administration. Many may not remember that the economic expansion was noticeably slowing in 2016, registering less than 1.4% growth between mid-2015 and mid-2016. Some wondered at the time whether we were on the verge of recession. It took a bold change in policy vision from 2017–2019 to help engineer the sharp turnaround in economic fortunes that ensued. In particular, the hot-but-not-overheating economy during those years was the product of America First and pro-growth policies that emphasized reducing burdensome regulations, achieving energy independence by removing barriers to energy production, reforming the tax code to make America globally competitive, promoting work, providing tax relief to hardworking Americans, and trade policies that encouraged domestic production and defended American workers against unfair practices abroad.  

The data speaks for itself. Our nation’s output grew at an average annual rate of 2.6% from 2017 to 2019; the unemployment rate fell to 3.5%, with prime-age labor force participation on the rise following years of declines, record low poverty. The COVID-19 pandemic interrupted this prosperity, with the economy contracting in the first half of 2020. However, the economy experienced a record rebound in the second half of the year, with GDP nearly back on track by the end of 2020 and the unemployment rate falling from 12.4% in April 2020 to just 6.4% in January 2021 and on its way further down. Inflation, by the way, was still below 2% in January 2021. 

That was the economy the Biden administration inherited and then proceeded to squander by enacting an inflationary, anti-work, anti-energy agenda on the American people. On day one, President Biden signed executive orders that implemented his promise to “end fossil fuels.” He signed the so-called “American Rescue Plan” that sent another $1.9 trillion into an economy that was already flush with cash and suffering supply constraints. He pursued inflationary big government socialism through the ironically named Inflation Reduction Act. 

Couple that with a tax and regulatory environment that has curtailed domestic production and reckless spending that has created the highest debt-to-GDP ratio we have seen since World War II, and we are seeing prices rise at the fastest pace in 40 years. Big government socialism always fails, and we must once again put the American people at the center of our economy. 

That means returning power to the people. From day one, newly elected leaders must: 

• Unleash American energy. This is accomplished via permitting reform, increasing drilling leases on federal lands, approving pipelines, licensing new refineries, and eliminating regulations that seek to curtail energy independence. 
• Let the American people keep more of their own money. Making the Tax Cuts and Jobs Act permanent will provide much-needed certainty to businesses looking to invest and should be the baseline for further growth-enhancing tax reforms. 

• Stop out-of-control spending. It is overspending that has caused both inflation and federal debt to balloon—not insufficient tax revenues, which are at record highs.  
• Target government assistance to the most vulnerable. Americans are compassionate people, but they also understand the value of hard work and responsibility. Particularly considering the ongoing worker shortage, we must promote paychecks over government checks by removing disincentives to work for able-bodied, prime-age adults. 
• Shift power back from Washington, D.C., to Main Street. The Biden Administration has added 193 million hours of paperwork onto the American people. Nearly 100,000 full-time workers are needed to comply with these additional bureaucratic dictates—a burden that small businesses, in particular, cannot bear. 

By implementing these policies, we can return to a confident, secure, and prosperous America in which robust, private-sector-driven growth makes the greatest economy in the world work for all Americans. Lower energy prices, a growing economy, rising paychecks, and a secure retirement are all again attainable if we return to the America First policies that have already been shown to work. They will work again. 

Michael Faulkender is a senior fellow at the America First Policy Institute and professor of finance at the University of Maryland. Previously, he served as assistant Treasury Secretary for economic policy (2019–21).