Introducing the 'Prosperity Impact Statement'
Republicans and Democrats supposedly can’t agree on anything, but they both declare strong support for greater national economic growth led by the private sector. That’s why Washington should get behind a new, non-partisan standard for evaluating how economic policies impact the nation’s growth rate. Let’s call it a prosperity impact statement—a simple, straightforward evaluation that, if followed, could supercharge our economy and solve many of the problems facing our nation today.
While economic growth won’t solve all of our nation’s problems, it is abundantly clear that without growth we can’t solve any of them. That is why a bipartisan accord on stimulating economic growth is not hard to understand. Growth is the silver bullet for increasing national prosperity, expanding the number of good paying jobs, raising public treasury receipts, reducing the national debt, and fixing the debilitating imbalances in U.S. mandatory spending programs. It can’t be overstated how much these imperatives would be lifted by bettering the sub-2% annual national economic growth rate of recent years.
What exactly is growth? Simply put, it is the increase in the nation’s economy to produce goods and services over a given period. National economic growth capacity is a function of three primary factors: ample capital, productive labor, and outstanding innovation.
What does a nonpartisan, growth-focused policy filter look like? Four screening questions come to mind:
Will the net effect of the policy encourage or discourage capital formation and private-sector investment?
Will the proposal foster or inhibit the development of a skilled and productive labor force?
Will its implementation promote or deter innovation?
In effect, will the proposal promote sustainable growth, make our country stronger, and improve the general quality of life, or not?
No economic policy, law, rule, or regulation should be adopted without a detailed and publicly available analysis on all four criteria and their net effects. Current law and policy should be subject to the same evaluation.
Congress needs a new operating system to reestablish trust with the public—one that can transcend the inevitable to-and-fro of administrations and partisan power. A common evaluation criteria for economic policy would satisfy the country’s requirement for strategic clarity and positive, bipartisan action focused on national interest. There is no better and more effective place to start then on matching election-year rhetoric with unified action in the quest for dependable economic growth—and no better time to start than now.