The Moral Case
Economic growth creates far more than a wealthy and prosperous society. Growth creates opportunity, mobility, and social cohesion. A society without growth has no new opportunities, not just for those born into privilege but also for those who have had less access to opportunity. In a tough market, the most qualified will continue to succeed, but over time more and more people will fall behind. To fulfill the moral promises of the pursuit of happiness, fairness and helping the less fortunate, America must experience strong economic growth.
After all, this is the American dream. Our immigrant ancestors didn’t travel to these shores for better income redistribution. They came for opportunity, for themselves and their children. Today, many people around the world still see America as a beacon of opportunity, and every year thousands uproot their fortunes to take a chance on this dream. We must create a pro-growth environment to generate enough opportunity for each American to be able to follow his or her calling.
There are two theories on how to grow the U.S. economy. The first holds that the key to growth can lie in government. The strategy then entails increased spending, higher taxes and more borrowing. This is the path the U.S. has chosen for the last three years, and growth has lagged terribly behind other recessions. The second theory holds that the source of growth is free enterprise. This means a strategy that focuses on the entrepreneurial drive in the American spirit through lower taxes, decreased regulatory barriers and policies that make it easier for entrepreneurs to succeed.
First, the government should get out of the way of business (America’s engine of growth) by reducing unnecessary regulatory barriers and lowering taxes. The government should encourage businesses to productively meet citizens’ needs — not lobby for favors — by closing tax loopholes.
Second, overall government spending should be capped and cut. Government spending hampers growth as taxes create a drag on job creators and innovators, and debt decreases investor confidence in the American economy. Investors know that these debts must later be paid through higher taxes, or else the government must default. This lowers the outlook for future growth and hurts investment today.
Third, the U.S. should stimulate growth by encouraging talented people to come to America. High-skilled immigration creates American jobs and allows citizens around the world to participate in the same American dream many of our ancestors sought. For every high-skilled immigrant who comes to America, 2.62 new jobs are created. This virtuous cycle of opportunity helps make America a symbol for the world and should be encouraged with smart policy.