By: Dr. Bob McClure
October 15, 2020
The saying goes that the proper way to boil a frog is slowly, a degree or two at a time. That way the frog doesn’t hop out. It gets comfortable in that slow, warming pot, until it’s too late. I’ve been thinking about that metaphor a lot lately and I fear it’s one that may be a little too close to reality when it comes to the current path of our country and its economic future.
We have become the lone economic superpower in the world because we’ve generally stuck to a tested formula – keep federal involvement in our economy limited, encourage and celebrate free market entrepreneurs, protect private property rights with the rule of law, and manage the country’s finances in a way that doesn’t lead to national bankruptcy.
Nothing this side of heaven is perfect, but this combination recognizes that the strength of our economy is derived from tens of millions of people who take risks, create jobs, build wealth, and support growth from the bottom up – not the top down. Washington, D.C., will never be able to discern the best path forward for Lancaster, Pa., and how that differs from Jacksonville, Fla. It will never have a scalpel – only a sledgehammer.
The other common phrase echoing in my head lately is this – elections have consequences. And not just in the sense that a newly elected administration gets to set the agenda. That’s obvious. The consequences I think of are the ripple effects – felt in states, cities and families across the country. They are left with the hard decisions resulting from the direction D.C. takes – good or bad.
This is why The James Madison Institute, the organization I’ve been privileged to lead for more than 15 years, took on the task of figuring out what the 2020 election would predictably lead to – for the economies of five important battleground states – Florida, Ohio, Michigan, Pennsylvania and Wisconsin.
Why these states? All have different demographics and economies. They will more than likely determine the path of victory for either Donald Trump or Joe Biden, and hence the future decision-making process in Washington, D.C.
Policy agendas have real impacts – both direct and indirect – for everyone. Shifting direction toward a greater concentration of control in Washington, D.C., on healthcare will siphon more money from state economies and concentrate it among the bureaucrats in the federal government. That impact creates subtle changes in how much money we spend and how much wealth we grow.
Championing a “green new deal” and proclaiming an end to specific energy sources may sound innovative when uttered at a campaign stop. Pursuing that policy agenda, however, has real direct impacts on the millions of people employed in energy production, and indirect impacts on every single person starting their car or charging their cell phone. (That’s every single one of us.)
And what does the research show? Well – when examining the policy goals of the Biden-Harris campaign, it would shift trillions of dollars from the private sector to the federal government. How much? Overall, the spending proposals outlined by the Biden-Harris camp come out to more than $36 trillion – with a T – over 10 years.
That’s a result of socialized healthcare, a climate policy set to destroy traditional energy, “free college” and a few other menu items. Remember – the trillions being used to pay for the Biden-Harris agenda would be taken directly from taxpayers and financed with more and more debt (a debt currently north of $26 trillion and counting.)
The economic implications of the two agendas would also be markedly different. JMI’s research shows that under the Biden-Harris agenda, all the numbers that are important to families are lower. Nationally we could expect 2.6 million fewer jobs, $155 billion in reduced household income, and $237 billion less in GDP.
It seems nearly impossible to comprehend numbers so large. There’s an old saying that one death is a tragedy, a million deaths is a statistic. That’s why we looked at the fiscal and economic impacts in the five states. What does the agenda translate to for a schoolteacher in Detroit, or a family in Cincinnati or a single mom in Miami?
Just a couple of examples highlight the differences between the candidates. The Biden-Harris agenda means an additional $10,600 per person in federal taxes – more than $42,000 for a family of four in Pennsylvania. That is on top of what they currently send to Washington. Floridians would be hit with an additional $9,300 in federal taxes – roughly $37,500 for a family of four.
Policy is ultimately about tradeoffs. Do we want to concentrate more power, wealth and authority in Washington, D.C., at the expense of economic vitality in the states? Would we be better off overall sending more money to federal bureaucrats under the “guarantee” of some level of healthcare at some level of quality from some doctor we may or may not have ever met?
Are we more comfortable with siphoning money from entrepreneurs and job creators to pursue dreams of an economy without oil or natural gas? Are we OK with the idea of a federal minimum wage paying some more, but that reduces hours, jobs and benefits and results in more automation at the expense of those trying to gain a starting job?
This election will indeed have consequences. It may very well concentrate tremendous power in Washington, or continue the path to greater opportunity and prosperity by leaving power to the states, where it can best be harnessed by its citizens.
The heat has certainly been turned up and the frog may never leave the proverbial pot. It’s getting close. For more information on JMI’s research, including more data for each of the five states we examined, please check out www.BattlegroundStates2020.org – and vote like your economy depends on it. Because it does.
Dr. Robert McClure provides expert perspective on current issues facing our nation and his home state of Florida, the third-largest state in the nation and a policy bellwether for the country. Recently named one of the Most Influential People in Florida Politics, Dr. McClure serves as the President and CEO of The James Madison Institute, Florida’s premier free-market think tank. He is a frequent commentator on television and talk radio programs and has lectured nationally on diverse policy issues. Dr. McClure has been published numerous times at both the state and national level on topics including property rights, tax policy, health care, and education reform.