This article originally appeared on Real Clear Politics on August 6, 2020.
No matter who wins the election this November, the worst of the COVID-19 crisis will likely be over by Inauguration Day, thanks either to improved therapeutics or a vaccine. On the economic front, the data from May and June demonstrates that the U.S. labor market can recover rapidly. An essential element of that recovery will be incentivizing private sector businesses to reignite, grow and hire.
Absent sufficient tax revenue, the government can do little to address the difficulties we will face or the debt we incurred due to the pandemic. Those tax dollars come from the profits private sector businesses generate and the jobs (incomes) they create. The government’s ability to borrow is also dependent on the strength of the American economy, which is, in turn, dependent on a vibrant private sector.
The lesson of President Trump’s first three years in office was that tax cuts and deregulation incentivize private sector growth, creating jobs and increasing the competition for employees. The result was a flood of job openings, extremely low unemployment, significant wage growth, and people rejoining the workforce. We headed into the pandemic with the strongest labor market in modern times and that strength is beginning to reemerge as we recover.
So, how would presumptive Democratic presidential nominee Joe Biden reignite private sector growth coming out of the pandemic? Biden has already committed to significantly increasing both taxes and government regulation to implement his policies, virtually all of which envision expanding government’s role in our economy.
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