The Economy on Superphysics

The Economy

Fri, 01 Nov 2024 00:00:00 +0000

For several decades, establishment “elites” have failed the citizenry by refusing to secure the border, outsourcing manufacturing to China and elsewhere, spending recklessly, regulating constantly, and generally controlling the country from the top down rather than letting it flourish from the bottom up.

International Trade Administration

Fri, 01 Nov 2024 00:00:00 +0000

The International Trade Administration is centrally placed to craft and implement U.S. trade policy. Core to ITA’s mission is the expansion of trade and investment and the fostering of job creation, innovation, and economic growth, while also providing research and analysis that support USTR’s trade negotiations.

Departent of Commerce

Fri, 01 Nov 2024 00:00:00 +0000

This is charged with promoting economic growth, innovation, and competitiveness while providing the data that American businesses need to succeed.

Intended to serve with clarity of purpose as the voice of business in any President’s Cabinet, the Department of Commerce has suffered from decades of regulatory capture, ideological drift, and lack of focus. One long-standing joke maintains that the department, with its lack of coherence, is a holding company for the parts of the federal government that could not be housed elsewhere. Thus, in the 1990s, calls emerged to abolish the department and either spin off, zero-out, or consolidate its functions among other entities.1 At the same time, the department has a higher profile now than perhaps ever in its history.

Bureau Of Industry And Security

Fri, 01 Nov 2024 00:00:00 +0000

During the past two decades, technology transfer from America and its allies has helped accelerate adversaries’ technological and weapons capabilities. This technology transfer on a massive scale has occurred because of adversaries’ exploitation of the U.S.’s open economy and education system through both commercial transactions and university and government research programs.

National Oceanic And Atmospheric Administration

Fri, 01 Nov 2024 00:00:00 +0000

Break Up NOAA

The single biggest Department of Commerce agency outside of decennial census years is the National Oceanic and Atmospheric Administration, which houses the National Weather Service, National Marine Fisheries Service, and other components. NOAA garners $6.5 billion of the department’s $12 billion annual operational budget and accounts for more than half of the department’s personnel in non-decadal Census years (2021 figures). NOAA consists of six main offices:

Bureau Of Economic Analysis And The Office Of The Undersecretary For Economic Affairs

Fri, 01 Nov 2024 00:00:00 +0000

The Office of the Undersecretary for Economic Affairs is charged with:

conducting economic analysis
promoting business and commerce
guiding data-driven decision-making and evidence-building activities
increasing access to government data while ensuring privacy and confidentiality.

The office coordinates economic analysis needs across the Department of Commerce, leads the department’s initiatives and programs related to data, data policy, and data management, and provides policy direction and oversight for the Bureau of Economic Analysis (BEA) and the Census Bureau.

Economic Development Administration

Fri, 01 Nov 2024 00:00:00 +0000

The Economic Development Administration (EDA) is charged with investing in local communities to encourage and enable growth and innovation in the private sector, with particular focus on distressed or underserved areas. Over time, it has also served as a distribution mechanism for emergency relief funds (e.g., Hurricane Maria and COVID-19).

Department Of The Treasury

Fri, 01 Nov 2024 00:00:00 +0000

Introduction

The U.S. Treasury Department has a broad regulatory and policy reach. The next Administration should make major policy changes to: (1) reduce regulatory impediments to economic growth that reduce living standards and endanger pros- perity; (2) reduce regulatory compliance costs that increase prices and cost jobs; (3) promote fiscal responsibility; (4) promote the international competitiveness of U.S. businesses; and (5) better respect the American people’s due process and privacy rights.

Tax Policy

Fri, 01 Nov 2024 00:00:00 +0000

Tax reform should improve incentives to work, save, and invest by:

reducing marginal tax rates
reducing the cost of capital
broadening the tax base to eliminate tax-induced economic distortions by eliminating special-interest tax credits, deductions, and exclusions.

Tax compliance costs will decline precipitously if the tax system is substantially simplified.15 The Treasury Department should also promote tax competition rather than supporting an international tax cartel.

Taxpayer Rights And Privacy

Fri, 01 Nov 2024 00:00:00 +0000

Legal protections for taxpayer rights and privacy have improved during the past three decades, but they remain inadequate.42

Congress should do more. For example, interest on overpayments should be the same as interest on underpayments rather than the government receiving a higher rate, the time limit for taxpayers to sue for damages for improper collection actions should be extended, the juris- diction of the Tax Court should be expanded, and the tax penalty system should be reformed by rationalizing the penalty structure and reducing some of the most punitive penalties.43

China And Other Geopolitical Threats

Fri, 01 Nov 2024 00:00:00 +0000

Committee on Foreign Investment in the United States.

The interagency Committee on Foreign Investment in the United States should realign its priorities to meet the United States’ current foreign policy threats, especially from China. On October 20, 2022, the Treasury Department, which chairs CFIUS, adopted the first-ever CFIUS Enforcement and Penalty Guidelines50 on the committee’s national security risk mitigation requirements. However, there are no clear rules that guide CFIUS on mitigation monitoring, nor is there a published penalty sched- ule to standardize accountability when CFIUS pursues a civil money penalty for violators. In addition, Treasury—as chair of the committee—runs an opaque pro- cess that biases committee procedure toward corporate interests and away from national security interests. Finally, the committee’s jurisdiction does not extend over greenfield investments that Chinese state-owned enterprises have historically pursued in the United States, which leaves America vulnerable to an instrument of Chinese economic statecraft.

Improved Financial Regulation

Fri, 01 Nov 2024 00:00:00 +0000

One of the priorities of the incoming Administration should be to restructure the outdated and cumbersome financial regulatory system in order to:

promote financial innovation
improve regulator efficiency
reduce regulatory costs
close regulatory gaps
eliminate regulatory arbitrage
provide clear statutory authority
consolidate regulatory agencies or reduce the size of government
increase transparency

Merging Functions

The new Administration should establish a more streamlined bank and supervision by supporting legislation to merge the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Federal Reserve’s non-monetary supervisory and regulatory functions.

Other Reforms

Fri, 01 Nov 2024 00:00:00 +0000

U.S. Coast Guard and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. Congress should examine whether to return the Treasury’s former in-house law enforcement capabilities via the return of the United States Coast Guard and the Bureau of Alcohol, Tobacco, Firearms, and Explosives.

The Export–Import Bank Should Be Abolished

Fri, 01 Nov 2024 00:00:00 +0000

The Export–Import Bank of the United States (EXIM or the Bank) is a federal agency that was established in 1934 to provide export subsidies through tax- payer-backed financing to private exporting corporations, as well as to foreign companies buying U.S. exports, with the ostensible purpose of promoting American exports, creating jobs, supporting small businesses, improving U.S. competitive- ness, and protecting U.S. taxpayers.

THE CASE FOR THE EXPORT–IMPORT BANK

Mon, 01 Jan 0001 00:00:00 +0000

In 1986, President Ronald Reagan extended the charter of the Export–Import Bank (EXIM) by 6 years.

He declared that:

This sends an important signal to both our exporting community and foreign suppliers that American exporters will continue to be able to compete vigorously for business throughout the world.

Federal Reserve

Mon, 01 Jan 0001 00:00:00 +0000

Over time, Congress has delegated the responsibility for the nation’s money first to the Department of the Treasury and now to the quasi-public Federal Reserve System.

The Federal Reserve was created by Congress in 1913 when most Americans lived in rural areas and the largest industry was agriculture.

Monetary Rule Reform Options

Fri, 01 Nov 2024 00:00:00 +0000

While the above recommendations would reduce Federal Reserve manipulation and subsidies, none would limit the inflationary and recessionary cycles caused by the Federal Reserve. For that, major reform of the Federal Reserve’s core activity of manipulating interest rates and money would be needed.

K-Percent Rule

Fri, 01 Nov 2024 00:00:00 +0000

K-Percent Rule

Under this rule, proposed by Milton Friedman in 1960,31 the Federal Reserve would create money at a fixed rate—say 3 percent per year. By offering the inflation benefits of gold without the potential disruption to the financial system, a K-Percent Rule could be a more politically viable alternative to gold.

Small Business Administration

Fri, 01 Nov 2024 00:00:00 +0000

Mission Statement

Overview

Created almost 70 years ago, the SBA was launched under the Small Business Act with a mission to “aid, counsel, assist and protect, insofar as is possible, the interests of small business concerns.”1 According to its current mission statement: The U.S. Small Business Administration (SBA) helps Americans start, grow, and build resilient businesses.

History Of Mismanagement

Fri, 01 Nov 2024 00:00:00 +0000

Throughout its history, various SBA programs and practices have generated negative news headlines and scathing Government Accountability Office (GAO) and Inspector General (IG) reports that have centered on mismanagement, lack of competent personnel and/or systems, and waste, fraud and abuse.22

COVID-19 Lending Program Accountability and Cleanup

Fri, 01 Nov 2024 00:00:00 +0000

A major immediate priority for the next Administration should be a final accounting and accelerated cleanup of fraudulent COVID-19 loan and grant activity. As noted by the SBA IG, “managing COVID-19 stimulus lending is the greatest overall challenge facing SBA, and it may likely continue to be for many years as the agency grapples with fraud in the programs….”40 The next Administration should:

Sba Policy Priorities For 2025 And Beyond

Fri, 01 Nov 2024 00:00:00 +0000

Legislation

The new Administration can support SBA reform legislation proposed in Congress that aligns with key measures outlined in this chapter. It also can support legislative initiatives that would help SBA to focus on its core statutory activities such as capital access, federal contracting opportunities, and regulatory advocacy. For example:

Trade: The Case For Fair Trade

Fri, 01 Nov 2024 00:00:00 +0000

For decades the world has struggled with a shifting maze of punitive tariffs, export subsidies, quotas, dollar-locked currencies, and the like. Many of these import-inhibiting and export-encouraging devices have long been employed by major exporting countries trying to amass ever larger [trade] surpluses.

Challenge #2: Communist China’S Economic Aggression And Quest For World Domination

Fri, 01 Nov 2024 00:00:00 +0000

Among all of its bilateral trade relationships, America’s relationship with Communist China is the most fraught with difficulty.

The problem is not just that the relentlessly mercantilist and protectionist trade policies that China has pursued ever since its accession to the WTO in 2001 have led to chronic, massive, and ever-expanding trade deficits. Communist China’s economic aggression in the traditional trade policy space is further facilitated by equally aggressive industrial policies and technology transfer–forcing policies that are designed to shift the world’s manufacturing and supply chains to Communist Chinese soil.

Yes, Trade Deficits Matter

Fri, 01 Nov 2024 00:00:00 +0000

Our country has been behaving like an extraordinarily rich family that possesses an immense farm. In order to consume 4% more than we produce— that’s the trade deficit—we have, day by day, been both selling pieces of the farm and increasing the mortgage on what we still own.

The Case For Free Trade

Fri, 01 Nov 2024 00:00:00 +0000

Trade policy is a statement of American identity.

Our trade policy choices reveal America’s values and where we put our trust. Do we place our trust in Washington elites to revive a declining country, or do we trust in America’s tradition of entrepreneurs and everyday people blazing new trails?

Implementing The Conservative Vision

Fri, 01 Nov 2024 00:00:00 +0000

Vision will be crucial for the next conservative Administration, but nuts-and-bolts policies are also important. Making the conservative vision for trade a reality will require several actions, some of which may prove to be more difficult to achieve than others. Specifically:

Dealing with Disruption

Fri, 01 Nov 2024 00:00:00 +0000

Trade is disruptive. Though its long-run effect on employment is approximately zero, in the short run it can cost jobs and even depopulate towns.61 America’s resilience depends on its ability to adjust, but successful and timely adaptation is generally spontaneous in nature—the work of human action but not human design. Planned adjustment by governments has a much poorer track record.

The Jones Act

Fri, 01 Nov 2024 00:00:00 +0000

The Jones Act (Merchant Marine Act of 1920) requires that ships traveling between U.S. ports must be:

U.S.-built
U.S.-owned
U.S.-crewed

In practice, this is an “America last” policy that has decimated the American maritime industry.

Rejoin the Trans-Pacific Partnership.

Fri, 01 Nov 2024 00:00:00 +0000

Dropping out of the Trans-Pacific Partnership agreement might have been the Trump Administration’s biggest trade policy mistake.

The TPP was already negotiated and would have strengthened an alliance against China, including most of its biggest trading partners in East Asia and the Americas. America’s departure created tensions and infighting, distracting the U.S. and its allies from the goal at hand: countering China.