6 Ways We Could Speed Up the Economic Recovery in the U.S.
Make no mistake: the economy is on much better footing now than it has been at any time in the past five or six years. Jobs have returned, people are getting back to work, the stock market is up, and there is a general sense that things are headed in the right direction. Of course, there is the underlying truth that though things are better, the economic recovery since the past recession has been sluggish.
Every month, new reports are released that detail important economic metrics that we use to check the pulse of the United States as a whole. From employment numbers to housing sales, these numbers help us get a feel for which direction things are actually headed from an economic standpoint, but often they only shed light on a very limited part of the overall picture. The economy itself is so large and complicated that it’s hard for even the best and brightest to truly understand it, let alone the general public. That important little detail — the complexity of the world of economics as a whole — is often used to sway public opinion in elections, leading to overarching policy changes.
Obviously, it’s easy to blame the guy at the top for what’s happening in the country at any given time. No one could really hold President Obama responsible for the economic disaster he walked into during the first year or two of his presidency, which was largely due to mistakes from administrations before him. The same will go for the next president, whoever he or she will be. But the media and politicians like to play the blame game by pointing the finger at whoever they can in an effort to assign responsibility.
Instead of simply blaming him, her, or the next guy, are there any actual real world changes that can be instituted to get the economy back on the fast-track toward growth? Obviously, things are better now than they were in 2010, and there are a multitude of reasons why the economy has been sluggish. But how can we counteract? Surely there are steps that can be taken that will help restore the American economy to its former glory?
Well, there are. The question is whether or not our elected officials, and by-and-large our incredibly divided citizenry, to agree to set the wheels in motion. Here, we take a look at six actions we could take today that should give the economy a shot in the arm and pay off down the road. Many will look at these items and come up with justifications for why they would or would not work, and call into question the cost of the measures themselves. All fair questions, no doubt, but something has to be done, and by sitting around and blaming one another, nobody wins.
Here are six ways we can give the economy a jump-start and speed things up on the road to recovery.
1. Tax Reform
Tax reform is something that has been debated and argued for a very long time now, yet nothing ever seems to get done. The corporate tax is a mess, with many people either arguing that big businesses don’t pay nearly enough to constitute fair share, while others drone on about how over-taxation is driving many companies to flee the country and reestablish in places like Ireland. The very fact that businesses are actually making the effort to leave the country is a telltale sign that the whole system needs to be rebuilt.
From an individual standpoint, the tax system is incredibly complicated and often too difficult to understand. Many small businesses feel that the system is stacked against it, favoring larger companies. Both are correct to some degree, and by reforming the system, it’s possible to entice businesses to stay in the U.S., hire more people, and invest more in assets here. Naturally, there are other things to take into consideration, but by reforming the tax structure, we can help everyone — from individuals to businesses — in one fell swoop.
2. Improve Long-Term Growth Prospects
This is a bit ambiguous, but can be accomplished through a number of ways. Instead of focusing on getting the most bang for our buck right this second, how can we invest for the future? This is an issue that is seen in many big businesses as well in our day and age. Many CEOs, concerned about meeting shareholder’s demands for growth, often take undue risk to try and see immediate payoff. This, of course, can come contrary to what may be in the organization’s best interests in the long run. Sometimes risks pay off, and sometimes they don’t. With the economy at large, it’s better to take a tried and true method, and invest for the long haul.
There are a number of ways to do this. For starters, we need to put an emphasis on educating our children by investing much more into our school systems. We can also find ways to invest in our human capital by helping those in need develop skills and training for new jobs and careers, and getting more people back into the workforce. Finding ways to spur entrepreneurial spirit and small business is another way to increase economic activity, whether that be through training programs or some sort of government-backed incentive program.
There are ways to do it — we just need to be willing to take the steps.
3. Raise Labor Force Participation
This is one of the most obvious ways to give the economy a shot in the arm. We’ve been seeing for a few years now that jobs numbers are improving, but that really doesn’t give any attention to the details of what’s happening. While many people are finding work, it’s often part-time, low-wage, and unskilled work. The jobs that have returned since the recession ended are not the same jobs that disappeared, and that has undoubtedly played at least some part in having people turn away from the job market and instead rely on other means of survival.
How do we incentive people to want to get back to work? While millions absolutely do, there are others who need to be picked back up and reinvigorated. What incentives will get applicants back on the trail? Cutting unemployment benefits has been shown to be ineffective, so how about raising wages? A boost in the minimum wage, perhaps? Or how about expanding programs to offer tuition assistance to those who are employed? There are a thousand incentives to take a look at, and finding the right blend to improve the labor force participation rate will probably be taxing. But at some point, it will need to be addressed.
4. Immigration Reform
Immigration, like tax reform, is one of the constantly boiling hot topics in the United States. There are swaths of people who do not want to see our borders lined with immigrants desperate to get in, as the underlying belief that immigrants represent an economic threat still permeates. While those concerns are justified for some, it has been shown that immigrants are actually a boost to the economy on many fronts, providing the nation with new taxpayers, and adding significant chunks of productivity to the country’s overall GDP through goods and services.
So, by embracing immigrants, can we actually help the economy? Probably, but reforming the system is the most important step. Right now, because the system is in such disarray, many immigrants are more willing to just come into the country and stay illegally. This does have an effect on the economy, but can be fixed by overhauling the system. It’s hard to blame the people actually making the trip, however, as many come from violent places and are desperate to leave. America was founded on the idea that everyone was welcome, so it’s hard to act like the U.S. doesn’t have a history of (and is almost entirely populated by) immigrants.
Reform the system and take advantage of our new neighbor’s strengths for the greater good, rather than dwell on their weaknesses.
5. Raise Family Assistance
When the economy is sluggish, everyone suffers, but nobody more so than families, who often have a hard enough time as it is making ends meet. Since the economy turned sour in 2008 and 2009, millions of people turned toward charity and government assistance to get by. In recent years, there has been a lot of clamoring — mostly from conservatives — to cut back on programs that provide basic necessities to the poor, like food stamps and housing assistance, mostly as a part of budget cutbacks. By taking people’s food stamps away instead of declining to build a few dozen more missiles or tanks, we’re only putting the poor in a worse position than they already found themselves in.
Family assistance programs are essential to millions. People need help paying for outrageously expensive childcare if they hope to go to work or develop a career, and by offering some of the basic necessities in the kitchen, families are given a tremendous helping hand. By expanding these programs, we can help even more. Yes, it would cost more, but there ways to make it happen. After all, America is only as strong as its weakest citizens, so why not pull everyone up while we have the resources?
6. Access to Education
The traditional vehicle for propelling yourself up the economic ladder in America is education. By developing new skills and ideas through training and education, people have been able to lift themselves and their families out of poverty. That, however, has all taken a turn in recent years as education has become a huge issue. Tuition costs are completely out of control, and many students are saddled with debt that they may not be able to ever repay. Education — higher education, specifically — is quickly becoming a luxury only for those with the means to afford it, leaving many others behind.
If we can find a way to increase access to affordable and quality education, everyone will be better off. How many people are turned away from the entire system simply because of the high costs to get in? Sure, there are community colleges and localized training programs, but even those can be financially out of reach for many. If we can find ways to increase the number of stipends and scholarships, or even implement tuition assistance plans into current jobs, we can drastically improve access to quality education. Online programs are slashing the fixed costs needed for holding classes, so perhaps that’s another method for reaching the underserved. Many places offer people free college tuition simply for being a citizen. Perhaps that’s another route?
Either way, finding ways to increase access to education and training for everyone will be vital to the long-term health of the U.S. economy.