Many of you seem to prepare to vote for Mrs Clinton in spite of what she and her allies did to the once promising candidate Sen. Bernie Sanders. It seems also that accumulating evidence of her corruption has little effect on you. In part, it may be a diminishing returns phenomenon: The first mouthful of ice cream makes you very happy, the eleventh, not so much. Or, you might think of evidence of your beloved’s infidelity. The first revelation could kill you;…. In another part, – and I am speculating here – you may think that Mr Trump is so obscene, and so often sounds like a madman, that we can’t have him as a Commander-in-Chief, no matter what. In addition, Mrs Clinton promised you a lot of free stuff and you may be suppressing the thought that there aren’t enough of the very rich to tax to pay for all those gifts. (Look into your heart!)
This short essay is an attempt to remind you of your own interests. Mrs Clinton has said nothing – or so little that it’s easy to miss – about economic growth. One exception: She says she will follow Pres. Obama’s lead in shutting down the cheap energy that comes from American soil. That’s the same cheap energy that underlies America’s economic success.
Mr Trump has announced clearly that if he were president, he would cut taxes in general, and he would do his best to decrease the impact of regulations on business. You may be skeptical, thinking that a President Trump would lower taxes only for the rich. Well, even if that were true (it’s not) it would likely leave you better off than you are now. The rich and the very rich don’t eat the money they obtain, legitimately or not. They don’t bury it in their sumptuous manicured backyards. They invest it and this, in turn, creates job and a demand for workers. When employers compete for workers, wages and salaries go up as on an escalator. The rise affects positively even those whose labor is not directly in demand.
You might be cool to the idea of decreasing the weight of regulations. After all, you probably like the fact that the quality of your tap water is regulated (in most places.) However, many regulations are unnecessary and even the useful ones impose at least a bureaucratic burden on companies thus limiting their job creation. I remind you that many towns and counties have employees pension funds as their main financial problem. At the federal level, the problem is probably worse but it is obscured by the federal government’s huge ability to borrow. (By the way, you and your children will inherit the debt unless we experience high economic growth for many years.)
Here is an example of the weight of regulations from Santa Cruz, California, where I live. The city ordered me to repair a sidewalk in front of my house that has been deformed by a tree on my property, the same tree the city forbade me from cutting several years ago. I got three estimates from concrete contractors. In the two lowest estimate, the cost of a city permit accounts for about 1/6 of the total. (Yes, read this again: I have to pay the city for the privilege of making repairs I am forced to make by the city as a result of the city ‘s previous action.) It’s clear that the repair is going to cost more than it should, Either, the contractor will do less work because of this 1/6th burden. or, I will have less money to spend, to hire another company to paint my house, for example. Either way, city bureaucrats are eating potential income that would be better in the pockets of others.
A President Trump would also appoint Supreme Court Justices more likely to be favorable to enterprise than anyone appointed by Mrs Clinton.
Those are difficult things to think about if you have a job and others issues to deal with. Here is an easy way to quantify the problem.
Under the Obama policies that Mrs Clinton has promised to continue, the economy (GDP, roughly ) has grown only by about 1.5% a year.
Under Trump, there is a good chance it would grow at a historically normal 3.5%.
To get a handle on the difference, imagine you have $10,000 to invest, one time. At 1.5% per year, after ten years, you would have $11,600.
At 3.5%, you would have $14,100 after the same ten years.
The difference between the two figure, $2,500 is all potential investment and therefore additional employment or increased wages.
After twenty years, the figures are $13,500 and $19,900 respectively. That’s a difference of about $6,400 attributable entirely to low vs high growth rates. $6,400 is large amount of extra money to invest and to create jobs with. Remember also that it’s more than half of the amount you started with. ($10,000).
Briefly put: In a national economy growing at 1.5% many people or most people are morose because jobs are hard to come by and they don’t pay well. In an economy growing at a normal 3.5%, there is a lot of optimism in the air, nearly anyone can afford specialty beers, and having roommates who are not friends or lovers becomes an old bad dream.
I hope you will think of the next twenty years when you cast your ballot.
Please, think of sharing this essay on-line.