Growing Market Supply is the Economic Boost we Need

The United States economic output and spending volume isn’t impacting the world like it did in the past.

And you can’t spend your way out of a recession. That’s been proven. Instead, only supply side growth economics can generate the turnaround desired for the US economy.

And when it’s deliberately crushed as it is now, the outfall is bad for all countries. Without supply, the US has no real way to contribute to global growth. And the longer term consequences of artificial supply constraints aren’t mentioned by the media or government press releases. Their horizon is very limited.

Continuous suppression of the US economy can and likely will weaken US competitiveness vs China and create a negative environment for investors. Investors will invest overseas. Many experts have given grim predictions for the next 5 years and we wonder if this government-driven crushing is what they’re really referring to.

Being Uncompetitive is Unwise

Success in international trade comes via competitiveness or at least being strong, bold and investing in tech innovation while ensuring energy and materials are easily available.

A suppressed economy for too long ruins output, makes factories obsolete, and dampens competitiveness and investor optimism. US competitiveness has fallen for the last 3 decades, since outsourcing to cheap labor markets and corporate tax evasion became the norm.

The recent hype about “AI salvation” for America, is simply a hail mary pass to the end zone to allay American anxiety about the future. The USA is falling behind and people are worried. The AI hype bubble will be exposed as soon as the recession finally kicks in. The current market rally that’s lifted the S&P and NASDAQ is a head fake just as Mike Wilson of Morgan Stanley has said it is.

And our rosy forecasts for 2024/2025 might be in vain if we don’t stimulate supply. The low performing Dow Jones reflects the sour attitude toward supply.

The push from the Democrats to undermine the economy and fight investment and capitalism will have long term consequences too. Our fight against the anti-US movement to foster a pro-capitalism, pro-investment narrative is how we can bring back profitability to the stock market and help builders begin to build more housing.

The Republicans should be focusing on supply development, since growing market supply eases inflation and helps create stronger government — not a willful government compensating for weakness.

“Strengthening a soft economy and encouraging economic growth without worsening inflation requires prioritizing the economy’s supply curve instead of its demand curve.” — Manhattan Institute

The FED should have no place in a healthy economy. Funds should enable supply to support investment and productivity, and keep prices normal. US productivity is failing and without artificial stimulus spending, things could go badly without a turnaround in political ideology.

Growing the US Economy Protects Valuable Social Programs

Adopting a pro-growth economic policy is how we can protect seniors’ pensions and all the social programs which currently, are unaffordable and in jeopardy. Once government tax revenues fall, there will be serious outfall. Can we count on current stimulus spending to keep the US afloat till the next debt crisis date in June of 2025? Likely not. The FED is very insecure and likely anxious about suppressing the economy further through high interest rates.

Just like cutting off air and blood supply to a human body, there comes a point where the patient won’t recover. This US government is playing dangerous games when it puts the patient on the operating table and ignores vital signs.

The Dems current theory is that pushing the nation’s vital signs to zero, means the patient will be able to come back stronger after surgery.

They’ve been addicted to stimulus spending and getting off that illicit drug won’t be easy. They don’t see productivity and investment support as options, within their political doctrine.

Without printing more money, they may not be able to turn the economy around after a rate hike in July. When you set a big ship on a course, it takes time to adjust, and a global calamity of recessionary downtrend may not be fixable. The US doesn’t control foreign markets, and China and Russia communists are gaining the upper hand competitively. A decoupling from communism is going to have an impact. The US and Europe will need extra strength.

China’s communists have little sympathy for the US, and instead want to create new trade relationships with the rest of the world to benefit themselves only. And for the US, allowing communists gain control could be devastating to world peace and trade. It’s weak politics and is dangerous long term.

Suppressing the US economy though policy and misguided spending packages might not be recoverable. Investors will shy away. In fact, many investment advisors promote investing overseas as a more profitable alternative.

However, let’s consider the damage to the US economy alone.

Negative Outcomes From Suppressed US Economic Output

⦁ manufacturing volume falls
⦁ unemployment rises
⦁ investment falls
⦁ technology innovation and output falls
⦁ consumer spending falls
⦁ housing market recedes
⦁ new home construction falls causing home prices and rent prices to rise
⦁ lower government tax revenues
⦁ high social costs and political moves to cut pensions and social programs

How To Grow Economic Supply to Reduce Inflation

A report from the Manhattan Institute advises Investment tax reform, trade reform, regulatory reform, and labor reform — all of which are opposed by the Democrats.

“Congress needs a fresh approach to tackling the next recession, one that limits deficit spending in favor of a supply-side approach that would help mitigate inflation rather than exacerbate it.” — from the report New Economic Challenges, New Supply-Side Playbook: How Congress Can Fight the Next Recession by Allison Schrager and Brian Riedl, for the Manhattan Institute.

Key points from that study:

return to the full expensing of business equipment and research investment
remove taxes that penalize investment and productivity
stop debt financed stimulus spending
incentivize investment, and to bring future investment into the present and keep full expensing at 100% of qualified purchases for at least 2023 and 2024
accelerate the depreciation of building structures
tariffs should be rolled back, along with other long-standing policies that discourage fair trade and increase inflation
reform, labor supply and productivity rates must be supported as baby Boomer retirements work rates for prime-age males
introduce earned Income Tax Credit (EITC) to encourage work by raising after-tax pay and alleviate poverty
reduce social security penalties for seniors who continue to work part time
pass legislation which would slow the introduction of further harmful regulations slow the number of new regulations and burden productivity⦁ end “buy American” policies
end the prevailing wage policy set by the U.S. Department of Labor
end onerous, unnecessary environmental protection laws based on political dictates

Turning the US economy around to grow supply which would end inflation is the right decision.

If the politician you helped elect is insisting on the current government’s ideology, then you should swallow your pride and do the right thing. Fight for US economic improvement and support an investible future.

Your actions will determine taxation, employment, wages, retirement savings, and housing affordability. Support the USA and let’s make change.

Boost the 2024 economy and pave the way for a better tomorrow.