And sadly enough, this is all happening when the potential for growth, productivity, and wealth are at an all-time high.
First, thanks to the underperformance of this recovery, we are $2 trillion and nearly 10 million workers below potential output and employment. We could recapture this almost immediately with the right policies.
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Second, the digital age and technological revolution have made hyper-growth more, not less, achievable. Just consider how Uber has led to amazing price reductions and efficiency improvements in the taxi-cab industry. Or think of how smart phones, robotics, disease-killing advances in biotech, and new oil and gas drilling technologies are expanding our output and wealth. Because of this private-sector productivity revolution, we can produce far more in a day than our ancestors could in a month. And it’s only just starting.
We learned in the 1960s and 1980s how fast the economy can get back on its feet when policy mistakes are reversed. That’s the real case for optimism. Imagine for a moment that we abolished the corporate income-tax rate, slashing it from 35 percent to zero. The positive results would be near instant. In a matter of weeks, a tidal wave of capital and businesses would flow across our borders and deep into the United States.
The secular-stagnation argument is just an excuse for liberal policy failures. Keynesianism should now be recognized as snake oil. And Republicans should recognize they now have a big opening to convince America that “We can do bettah.”
Stephen Moore is chief economist at the Heritage Foundation.
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