As the U.S. faces a pivotal national election, the future economic well-being of the U.S. should be the overriding decision in assigning votes, overriding political rhetoric.  The economy of the U.S. is sound by any economic measure.  The GDP of our Nation comprises 50 percent of the other G7 nations combined, up from 40 percent in 1990. Per capita GDP contribution is 30 percent higher than for the E.U. and 60 percent higher than Japan, according to a review of the U.S. economy in the October 19^th edition of The Economist.

This article noted the inherent advantages enjoyed by the U.S. including energy resources, a vast consumer market and relative to the E.U., fewer restrictive regulation leading to the rise of companies applying high technology.  The U.S. dollar remains the world’s reserve currency. According to the International Monetary Fund the U.S. dollar comprises sixty percent of the reserves held by central banks.  Given the strength of agriculture and industry coupled with adoption of innovative technology and sound management, the average American worker generates $171,000 in economic output compared to $120,000 in the E.U.  Our productivity has increased 70 percent since 1990 compared to 30 percent in Europe and 25 percent in Japan.

We weathered the global fiscal crisis of 2008 avoiding a fiscal meltdown . We responded to the COVID pandemic with massive spending that cushioned the economy and prevented extensive social hardship.  The resulting inflation was however “tamed” by successively increasing the benchmark interest rate without generating unemployment and achieving a “soft landing” without creating a recession as has occurred in previous cycles.  The fiscal stimulus packages resulted in the U.S. recovering from the pandemic more quickly than other industrialized nations. The balanced recovery has placed the U.S. in a more favorable situation than its peers and competitors.

Ironically, factors that have contributed to the strength of the U.S. economy including immigration have been demonized in the pre-election period. A regulated flow of immigrants is necessary to offset a decline in population growth.  Qualified entrants have most certainly contributed to economic well-being in a variety of sectors including high technology, health and manufacturing.  Unskilled workers have supported agriculture and are necessary to perform work that U.S. citizens are disinclined to do. 

On the negative side, life expectancy in the U.S. has declined due to health issues centering on obesity, gun violence, opioid addiction and an unacceptable rate of child mortality.  Older Americans have a lower life expectancy after 65 than their peers in the E.U.

Despite the remarkable progress over the past three decades, there are clouds on the horizon and the U.S. may suffer from injudicious politically inspired economic decisions.  The debt-to-GDP ratio has nearly tripled since the outbreak of the global financial crisis of 2008 attaining 103 percent at present.  Economists forecast deterioration in this parameter with the debt-to- GDP ratio peaking at 160 percent within three decades unless spending is curtailed.  In 2016, the national debt stood at $25.6 trillion, rising to $32.6 trillion in 2020 and now stands at $35.8 trillion. Interest on the national debt represents seven percent of GDP at present but could soar to 12 percent in 2035.

Economic platforms proposed by the two competing presidential candidates promise little to reduce debt.  One candidate intends to reduce taxes on overtime earnings and tips representing $118 billion over ten years in addition to providing tax breaks on car loans. Proposed SALT deductions could boost national debt by $1 trillion over 10 years. These pre-election promises are intended to attract support from voters in pivotal states.  The other candidate is promising $25,000 to aspirant homeowners coupled with a program to erect three million dwellings togetherwith substantial tax breaks directed to the “middle class”. Many of the proposals from both candidates will probably never eventuate given that they must receive Congressional approval.

Economists have condemned the intention to place high tariffs on imported goods in an attempt to replace taxes with tariffs.  In addition, punitive tariffs applied as a surrogate for diplomacy will reduce agricultural exports and will severely impact rural communities that support an essentially isolationist policy without realizing the implications.

Pre-election rhetoric promising high tariffs and massive deportations and considerations such as interference by the White House in the Federal Reserve will create self-inflicted wounds.  Unrestricted spending on social programs and a continuation of antitrust activities including opposition to large and efficient meat and poultry production will be detrimental to specific sectors of the economy and to the nation at large. 

Irrespective of the outcome of the election, the winner must address the growing budget deficit that is now equivalent to seven percent of GDP.  Ultimately, our well-being will be dependent on productivity and population growth. Fiscal programs presented by both candidates for the Presidency are unworkable and unrealistic.  Let us hope that these are merely empty political gestures to win votes. Irrespective of the outcome of the election the incoming Administration in 2025 will have to adopt sound fiscal policies. Congress will have to be more accommodative, less partisan and willing to pass legislation through compromise in order to advance the economic well-being of the Nation and its citizenry.