Originally published with John Hendrickson at The American Spectator.
The only reason God put Republicans on this earth was to cut taxes,” stated the late columnist Robert Novak, who also was a strong supporter of supply-side economics. Tax reduction is a pillar of conservative fiscal policy. The making permanent or extension of the Tax Cuts and Jobs Act of 2017 (TCJA) is a main fiscal policy priority for President Donald Trump and the Republican-led Congress. For the most part, Republicans agree that the TCJA benefits taxpayers and the economy and should be made permanent. However, tension is brewing between spending cuts and tax reductions. Republicans are in a pickle. The failure to extend or make permanent the TCJA will have severe economic consequences. But, extending the TCJA without meaningful spending reductions could make the national debt worse. For decades, there has been a bipartisan out-of-control spending problem, leading to more than $36 trillion in national debt. The Republican Party, as the more conservative party, should be more fiscally conservative, but that hasn’t always happened. With the creation of the Department of Government Efficiency (DOGE) headed by Elon Musk, President Trump appears to be serious about finding ways to reduce regulation, waste, and bureaucracy. DOGE has also encouraged members of Congress who are eager to reduce spending. The crusade to cut spending is already becoming difficult. For starters, the Washington Times has reported that some Republicans are starting to get anxious that spending cuts, especially if it impacts their district, will hurt them in the midterm election. In addition to faster economic growth with TCJA, there is a need for spending reductions not to crowd out that growth and counter the positive effects of the tax cuts. Another potential problem is that many lawmakers are advocating for special tax carve-outs. These include a tax deduction for emergency power generators, increasing the cap on the state and local tax deduction (SALT), no tax on tips, and a 15 percent corporate tax rate for companies manufacturing in the U.S., among others. While these carve-outs have different interest groups, they will reduce the amount collected to “pay for” the overall tax cut package and provide little to no incentives for growth. With a small majority in the House and having to find agreement in the Senate, Republicans do not have much room for defections. Concerns have been raised that “budget hawks” may scuttle any tax bill. As an example, the Committee to Unleash Prosperity is “worried that some House Republican budget hawks — many of whom are our friends — want to hold the tax cut hostage to force Congress’s hand on spending cuts.” It should be noted that the committee does not oppose spending cuts and, in fact, they support efforts to lower spending, but they make the correct argument that the failure to “extend the Trump tax cuts would trigger one of the biggest tax hikes in American history.” Further, the consequence of allowing the TCJA to expire would result in a massive tax increase and contribute to “reducing GDP by $1 trillion and destroying 6 million jobs.” As the committee argues, this is not only fiscally irresponsible but also disastrous for the economy. Another interesting dilemma is that both the budget hawks and the tax cutters are correct. The spending crisis must be addressed, and the TCJA must be extended or ideally made permanent. Lawmakers should also consider more pro-growth, broad-based relief, like lowering the corporate tax rate to 15 percent and flattening the brackets to ultimately a flat income tax. This is possible and Republicans only need to rediscover their fiscal conservative heritage for guidance. Presidents Warren G. Harding and Calvin Coolidge reduced tax rates and cut spending during the 1920s. The federal government was certainly different and much smaller than today, but Harding and Coolidge, along with their budget directors, had to fight for spending reductions. Andrew Mellon, who served as secretary of the treasury and was the architect of the Harding and Coolidge tax cuts, believed that balancing budgets and limiting spending were just as important. George M. Humphrey, secretary of the treasury in President Dwight D. Eisenhower’s administration, was another budget hawk like Mellon. Humphrey understood the importance of lower tax rates, but he also warned about the consequences of uncontrolled spending which led to debt and inflation. “Deficits and the theft of inflation which results [from uncontrolled spending] should be avoided like the plague,” warned Humphrey. “We must not cut taxes on borrowed money and so pass on more bills to our children and grandchildren,” stated Humphrey in 1956. Further, he argued that “a balanced budget is the first step toward another tax cut.” Republicans should learn from the Harding and Coolidge administrations as well as Mellon and Humphrey that lowering tax rates is important but balancing the budget through more economic growth and less spending is crucial.
0 Comments
Originally published at NBC News with my quote below.
President Donald Trump has repeatedly criticized the nation’s trade deficit, which the Commerce Department reported Wednesday reached a new record high. But the same Commerce report showed the value of American exports had also hit a new record, indicating there’s still strong demand for U.S. goods and services abroad. A trade deficit simply means a country is importing more than it is exporting. As the Congressional Research Service reported in 2018, Trump’s fixation on reversing the deficit “contrasts with the views of most economists.” Maintaining a deficit usually says little about the state of a country’s economy. The U.S. trade deficit reflects strong domestic growth and consumption, especially relative to the weaker economic performance seen in many parts of the world, including most other Western developed countries. “Trade helps us to be better off,” said Vance Ginn, an economist and adviser in Trump’s first term. Whether it is sourcing goods that the U.S. no longer produces or which can be produced more cheaply elsewhere, large American import levels reflect strong demand from consumers for stuff — and the U.S. economy as a whole generally benefits from this arrangement, Ginn said. Countries with large trade surpluses, such as China, Russia and Saudi Arabia, tend to be heavy exporters of natural resources with relatively lower rates of domestic consumption. Trump has indicated he may prefer the U.S. to more closely resemble this group of nations. In his executive order last week laying out his new administration’s trade priorities, “investigating the causes of our country’s large and persistent annual trade deficits in goods” was the first item listed. Asked what Canada and Mexico needed to do to avoid sweeping new 25% tariffs, Trump said Sunday, “They have to balance out their trade, number one. We have deficits with almost every country — not every country, but almost — and we’re going to change it.” Because Americans tend to buy more and save less than those ib other countries, a deficit persists. Economists are nearly unanimous that Trump’s call for tariffs to reverse the deficit would raise costs for U.S. consumers — and the president himself recently acknowledged their imposition would likely lead to “pain” for some time. Trump often cites William McKinley, a former U.S. president who, as a congressman, helped implement massive trade duties, as his lodestar for how he believes the U.S. economy should be run. McKinley was indeed successful in raising large sums of money for the U.S. government several decades before the first national income tax was implemented. However, by the time McKinley was sworn in as president in 1897, the country’s transition from an agrarian to an industrialized economy had accelerated, and he ultimately abandoned the use of tariffs in favor of reciprocal trade agreements. There may have been a point in the 1980s and 1990s when America’s widening trade deficit began to cause problems again. In testimony before the U.S. Senate in 1998, Robert Scott, an economist with the left-leaning Economic Policy Institute, said trade imbalances had likely contributed to 2 million manufacturing job losses between 1979 and 1994, with hundreds of thousands resulting from the 1992 North American Free Trade Agreement alone — a pact Trump repeatedly criticized before replacing it with the United States-Mexico-Canada-Agreement in 2018. His latest volley of tariffs would contravene that very deal, which is up for review in the middle of next year. Along with the lost jobs was the effect on wages, Scott said. Since 1979, Americans’ inflation-adjusted earnings have risen only by 12%, even as the size of the overall U.S. economy has grown exponentially during the same period. Wealth inequality, too, accelerated during this time. The Wall Street Journal’s right-leaning editorial board has noted the “contradictions” of Trump’s economic policies. “Mr. Trump likes tariffs and wants more of them, but he also wants a weaker dollar to promote U.S. exports, and the two desires are in conflict,” it said this week. Most economists, left and right, believe that at this point, it would be extremely difficult to bring back a meaningful number of manufacturing roles — and that those that still exist currently benefit from lower trade barriers and, in some cases, recent federal programs designed to prop up key industries like semiconductor manufacturing. “It would be better if Mr. Trump and his crew dropped the strong dollar-weak dollar chatter and focused on a stable dollar,” the Journal’s editorial board wrote. “That’s what inflation-weary Americans elected the President to do.” Originally published at Mackinac Center for Public Policy.
MIDLAND, Mich. — After blowing through a $9 billion surplus and seeing slowing economic growth, Michigan lawmakers have a critical opportunity to embrace fiscal restraint and adopt a Sustainable Michigan Budget. Holding state spending to the rate of inflation and population growth would enable the state to prepare for the future, reduce debt and provide tax relief to residents. Over the past two years, Michigan’s Democratic majority allocated $3 billion to district grants and $4.7 billion in select business subsidies — spending that has failed to yield significant benefits. A recent Mackinac Center study shows that such subsidies rarely deliver on job creation promises. Of the thousands of jobs promised in headlines in the Detroit Free Press from 2000 to 2020, only 9% materialized. These subsidies serve political interests rather than economic sustainability, diverting resources from essential services like education, infrastructure and taxpayer relief. A Sustainable Michigan Budget would limit spending growth to 3.6% this cycle, ensuring the state meets its financial obligations, including pension debt payments. Fiscal discipline would also give lawmakers flexibility to respond to future downturns without resorting to budget cuts or tax hikes. “Michigan lawmakers can achieve more by exercising fiscal restraint,” said James Hohman, director of fiscal policy at the Mackinac Center for Public Policy. “Restraint allows flexibility in tough economic times, ensures debt reduction, and provides greater capacity for key services and tax relief.” Last year, legislators diverted $670 million away from pension debt payments, worsening the state’s liabilities. Michigan’s largest creditors are public employees in the state retirement system, who depend on lawmakers to uphold pension commitments. With Republicans taking control of the Michigan House, there’s an opportunity to correct course. Although pandemic-era federal funds are gone, state revenues remain strong, allowing lawmakers to establish a fiscally responsible framework. “States that practice sustainable budgeting can offer greater tax relief and foster economic growth,” said Dr. Vance Ginn, president of Ginn Economic Consulting and a senior fellow with the Mackinac Center. “Michigan has a chance to lead by adopting responsible budgets that prioritize long-term prosperity over short-term gains.” This year presents the ideal moment for decisive action. A Sustainable Michigan Budget will not only stabilize the state's financial future but also ensure that taxpayer dollars are spent responsibly. In this conversation, Dean Ball and I explore the transformative potential of artificial intelligence (AI) and its implications for society, economy, and governance. Dean is a senior fellow at the Mercatus Center at George Mason University. He shares his motivations for engaging with AI, his journey into the field, and the misconceptions surrounding it. We discuss the historical context of technological advancements, the impact of AI on labor markets, and the regulatory challenges that arise as states like Texas introduce new frameworks for AI governance. Dean emphasizes the need for a balanced approach to regulation that fosters innovation while addressing potential risks and the connection with energy abundance.
Originally published at Texans for Fiscal Responsibility. Recent proposals by President Donald Trump to establish a U.S. Sovereign Wealth Fund (SWF) and by Texas Lieutenant Governor Dan Patrick to remove the cap on Texas’s Economic Stabilization Fund (ESF) are deeply flawed. Both ideas assume that government-run investment funds can replace responsible fiscal policy. Instead of hoarding excess taxpayer money, Texas and the federal government should cut taxes, limit spending, and allow the free market to drive economic growth. Federal Concerns: A Sovereign Wealth Fund Amidst Mounting DebtOn February 3, 2025, President Trump signed an executive order directing the Treasury and Commerce Departments to develop a plan for a U.S. sovereign wealth fund within 90 days. The administration argues that such a fund could:
The U.S. national debt now exceeds $36 trillion, and unfunded liabilities from Social Security and Medicare surpass $100 trillion. While well-intentioned, creating a sovereign wealth fund would not fix these problems—instead, it would give future politicians another pot of money to mismanage. Rather than relying on government-run investment schemes, the real solution is quite simple:
Texas’s Rainy Day FundAt the state level, Lieutenant Governor Dan Patrick’s Senate Bill 23 (SB 23), authored by Senator Charles Schwertner, proposes removing the cap on the Economic Stabilization Fund (ESF), also known as the rainy day fund. The ESF—created in 1988—was initially designed to help Texas manage revenue volatility from oil and gas production, which once accounted for 25% of Texas’s economy (compared to less than 10% today). Currently, the ESF cap is 10% of certain general revenue over the previous biennium. Based on Comptroller Glenn Hegar’s January 2025 Biennial Revenue Estimate, the fund is expected to hit its $26.51 billion cap by 2026. Without the cap, the fund could balloon to over $80 billion by 2035—money that should instead go back to taxpayers. The Case for Cutting Severance Taxes Instead Instead of removing the ESF cap and hoarding revenue, Texas lawmakers should cut severance taxes on oil and gas production.
The recent $5 billion Texas Energy Fund, which subsidizes natural gas projects, is a band-aid solution to a problem caused by overregulation and an unlevel playing field in the energy market. Instead of forcing taxpayers to subsidize natural gas, Texas should cut severance taxes to make oil and gas more competitive against unreliable renewables. Why Removing the Cap Is a Bad Idea Removing the ESF cap would:
Rather than removing the ESF cap or creating a sovereign wealth fund, Texas should:
Bottom Line: Let People Prosper, Not PoliticiansWhile well-intentioned, Trump’s proposed federal sovereign wealth fund and Patrick’s push to remove the ESF cap suffer from the same flaw: they prioritize government control over taxpayer freedom.
Texans and Americans don’t need more government-run investment funds—they need lower taxes, limited government, and free-market energy policies. Texas and the federal government shouldn’t hoard money when it could be used to cut taxes, promote economic growth, and strengthen the energy industry. Let people prosper--not politicians. Originally published with James Hohman to Mackinac Center.
Restraint gives Michigan lawmakers more power than spending every dollar they have. They can prepare for an uncertain future. They can pay down existing debts. They can afford to let people pay less in taxes. Unfortunately, restraint has not been a priority for elected officials. Michigan’s Democratic majority began its tenure with $9 billion in surplus money. Their largest priorities were business subsidies and pork. The last two budgets authorized $3 billion in district grants and $4.7 billion in business subsidies. Residents are unlikely to get much in return. The business subsidies have yet to create any jobs, and there is reason to believe that companies will fail to deliver on their promises. The state’s major business subsidy deals from 2000 to 2020 produced just 9% of the jobs promised. Even with large subsidies, the state fell behind the economic growth experienced in the rest of the country. The point of letting legislators bring back cash to their districts is not to deliver good outcomes to state residents. It’s a reward where money does not go to its best purpose but to where it can provide a political return for particular elected officials. The money spent on business subsidies and district grants would be better used on schools, roads, and key services, or it can be returned to taxpayers. While it may sound contradictory, lawmakers can do more when they spend less. Restraint allows them to increase the budget when revenues decline because they’ve saved money in the past when the budget grew. Restraint can help get the state out of debt and provide more for services or tax relief. That’s why lawmakers ought to pass a Sustainable Michigan Budget and increase the budget by no more than the rates of population growth and inflation. For the upcoming budget, this is no more than 3.6% growth in state spending. Lawmakers make bad decisions when they refuse to pass sustainable budgets. Last year, for instance, this lack of restraint encouraged legislators to make irresponsible decisions such as deferring pension debts. The state’s largest creditors are not banks or bondholders; they are the members of the state-operated retirement systems who are not supposed to be creditors. Unfortunately, lawmakers promised them pensions but did not set aside enough money to pay for them. As part of last year’s budget, elected officials took $670 million away from pension debt payments in order to put more money into other priorities. They wouldn’t have needed to do this if they had passed sustainable budgets. This year may be different, as Republicans take over the majority in the state House of Representatives. The new leadership would benefit from practicing restraint. State revenues increased after the COVID-19 pandemic and have remained high. In addition, the federal government showered the state with cash, and the extra money has now been spent. Officials expect state revenue to grow this year, giving lawmakers more cash to play with even though surpluses were exhausted. This is the right year to pass a Sustainable Michigan Budget. Restraint will allow the state to do more and help lawmakers avoid the bad decisions they’ve made in the past. Originally published at Mackinac Center for Public Policy with James Hohman.
Restraint gives Michigan lawmakers more power than spending every dollar they have. They can prepare for an uncertain future. They can pay down existing debts. They can afford to let people pay less in taxes. Unfortunately, restraint has not been a priority for elected officials. Michigan’s Democratic majority began its tenure with $9 billion in surplus money. Their largest priorities were business subsidies and pork. The last two budgets authorized $3 billion in district grants and $4.7 billion in business subsidies. Residents are unlikely to get much in return. The business subsidies have yet to create any jobs, and there is reason to believe that companies will fail to deliver on their promises. The state’s major business subsidy deals from 2000 to 2020 produced just 9% of the jobs promised. Even with large subsidies, the state fell behind the economic growth experienced in the rest of the country. The point of letting legislators bring back cash to their districts is not to deliver good outcomes to state residents. It’s a reward where money does not go to its best purpose but to where it can provide a political return for particular elected officials. The money spent on business subsidies and district grants would be better used on schools, roads, and key services, or it can be returned to taxpayers. While it may sound contradictory, lawmakers can do more when they spend less. Restraint allows them to increase the budget when revenues decline because they’ve saved money in the past when the budget grew. Restraint can help get the state out of debt and provide more for services or tax relief. That’s why lawmakers ought to pass a Sustainable Michigan Budget and increase the budget by no more than the rates of population growth and inflation. For the upcoming budget, this is no more than 3.6% growth in state spending. Lawmakers make bad decisions when they refuse to pass sustainable budgets. Last year, for instance, this lack of restraint encouraged legislators to make irresponsible decisions such as deferring pension debts. The state’s largest creditors are not banks or bondholders; they are the members of the state-operated retirement systems who are not supposed to be creditors. Unfortunately, lawmakers promised them pensions but did not set aside enough money to pay for them. As part of last year’s budget, elected officials took $670 million away from pension debt payments in order to put more money into other priorities. They wouldn’t have needed to do this if they had passed sustainable budgets. This year may be different, as Republicans take over the majority in the state House of Representatives. The new leadership would benefit from practicing restraint. State revenues increased after the COVID-19 pandemic and have remained high. In addition, the federal government showered the state with cash, and the extra money has now been spent. Officials expect state revenue to grow this year, giving lawmakers more cash to play with even though surpluses were exhausted. This is the right year to pass a Sustainable Michigan Budget. Restraint will allow the state to do more and help lawmakers avoid the bad decisions they’ve made in the past. Major changes are underway in the federal government with Trump in office. He's tackling the size and scope of government, which is a long overdue move. We’re also gaining more insight into President Trump’s plans to impose tariffs, which could raise American prices. Now is the time for bold reforms—whether it’s slashing government spending, championing free markets, or encouraging innovation to maintain our global competitiveness. In this episode, I also explore a Texas school choice bill, a new competitor in the AI sector, calls to abolish the CFPB and much more. Thanks for joining me in this episode of "This Week's Economy."
For more insights, visit vanceginn.com and get even greater value with a paid subscription to my Substack newsletter at vanceginn.substack.com. Originally published at The Washington Examiner.
The Biden administration’s antitrust crusade may be over, but the damage to America’s tech leadership remains. Overregulation and bureaucratic overreach left U.S. companies navigating uncertainty while global competitors such as China surged ahead. The American Action Forum found that former President Joe Biden increased regulations by nearly $2 trillion over the last four years, raising hidden taxes. Under President Donald Trump, with a Republican-led Congress and the opportunity to confirm key nominees, there’s a path to unleash a tech revolution, as I recently wrote in a report partnered with NetChoice. By restoring the consumer welfare standard and rejecting heavy-handed regulation, the Trump administration, in which I worked to support this approach and reduce spending in his first term’s budgets, can spark a new era of innovation and growth in America’s tech sector. The consumer welfare standard ensures that antitrust enforcement focuses on consumer benefits, not punishing business success. The Biden administration ignored this principle, favoring interventionist policies that stifled innovation and raised costs. Trump’s vision should offer a sharp contrast. With the Senate tasked to confirm leaders at the Federal Trade Commission and the Justice Department, the administration can install officials who champion free-market principles, providing the stability necessary for companies to thrive. America’s tech industry is vital to economic growth and national security. Employing nearly 10 million people and contributing almost a third of the S&P 500’s market value, the sector drives advancements in artificial intelligence, cybersecurity, and advanced manufacturing. However, under Biden, these achievements were undercut by policies that raised barriers for small businesses and startups. While U.S. companies grappled with regulatory hurdles, China accelerated its dominance in critical technologies such as 5G and AI, leveraging state subsidies to widen the gap. The Trump administration can reverse this trend by removing barriers to growth and ensuring a competitive environment that rewards innovation. With Republican majorities in Congress, legislators should advance policies that foster growth and innovation. The Senate confirming nominees who defend the consumer welfare standard is a first step toward ensuring antitrust enforcement serves consumers, not bureaucratic agendas. By dismantling the web of overregulation and reducing the corporate income tax rate to at least 15%, Congress and the administration can allow U.S. companies to compete globally without being hampered by unnecessary constraints. This approach isn’t just about tech giants in Silicon Valley — it’s about creating opportunities nationwide. Platforms such as Amazon and Etsy empower small businesses to scale and reach global markets. By fostering competition and reducing barriers to entry, the Trump administration can expand these opportunities, driving growth in heartland states and empowering entrepreneurs to succeed in the digital economy. Beyond economic growth, America’s leadership in technology is critical for national security. Leadership in AI, quantum computing, energy, and cybersecurity is essential for maintaining strategic advantages over global adversaries. China’s authoritarian model prioritizes short-term gains at the expense of long-term innovation, while the U.S.’s free-market system fosters ingenuity and resilience. The Trump administration can secure the nation’s technological and geopolitical future by reestablishing America’s commitment to this model. Regulatory missteps have allowed foreign competitors to shape the future of technology. If America is to remain the global leader, bold action is required. With Trump at the helm and a Republican-led Congress ready to act, there’s an opportunity to reaffirm America’s position as the world’s innovation capital. By rejecting past mistakes and embracing free-market principles, the U.S. can ensure the next wave of breakthroughs is made in America, not dictated by Beijing or Brussels. America’s tech sector can thrive with key confirmations and policies aligned to foster competition and innovation. The Trump administration must seize this chance to rewrite the narrative, empowering businesses, protecting consumers, and securing America’s future as the global leader in tech, thereby further advancing the next revolution to let people prosper. Watch my interview in NTD News on 1/31/2025.
Welcome to this episode of the Let People Prosper Show, where we discuss critical issues in public policy, economics, and the future of prosperity. Today’s guest is Joe Grogan, founder of Fire Arrow Consulting and a leading healthcare policy expert with decades of private and government experience. Joe served as the Director of the Domestic Policy Council under President Trump, where he played a pivotal role in shaping healthcare policy, including efforts to improve transparency and market competition. He is also the co-host of the DC EKG podcast, where I was recently on his show to dive into healthcare reform, economic policy, and the power of state-level innovation.
For more insights, visit vanceginn.com and get even greater value with a subscription to my Substack newsletter at vanceginn.substack.com. (0:00) – Introduction to Healthcare Policy and Joe Grogan’s Background Joe shares how his experience in both the private and public sectors shaped his views on healthcare reform. (3:09) – The Evolution of U.S. Healthcare Policy Exploring how the Affordable Care Act and past reforms have altered the healthcare landscape. (6:01) – Challenges in Reforming Healthcare Joe delves into the bureaucratic barriers and inefficiencies that complicate meaningful reform. (14:57) – Price Transparency and the Marketplace of Healthcare Discussing the critical need for transparency and how it can transform healthcare into a functioning marketplace. (28:40) – Federal Block Grants for State Flexibility Examining how block grants could simplify and improve Medicaid while empowering states to innovate. (34:55) – Data Transparency and Government Accountability How improving data availability can drive innovation and ensure better healthcare outcomes. (42:52) – Future Opportunities in Healthcare Reform Joe shares his optimism for bipartisan solutions and what needs to happen next to empower patients and improve efficiency. Originally posted to DC Journal at InsideSources. Artificial intelligence is reshaping our lives at breakneck speed. From chatbots to self-driving cars, companies like Microsoft, Google, IBM and OpenAI are racing to define the future. Yet, as AI advances, so does the race to patent every corner of this emerging frontier. The stakes are enormous, and how America handles intellectual property rights could make or break innovation in AI. Unfortunately, the U.S. patent system is rife with inefficiencies threatening to stifle the innovation it’s meant to encourage. Without reform, outdated and inconsistent processes could allow opportunists to gum up the works, leaving innovators tangled in legal disputes instead of building the tools of tomorrow. The result? Higher consumer costs, fewer breakthroughs, and a dangerous edge for global competitors. The U.S. Patent and Trademark Office has taken a step in the right direction by updating its guidance on AI-related patents. The agency’s deliberate approach aims to ensure patents are carefully considered, but even the best intentions can falter under a bloated system. In 2020, the USPTO received 650,000 patent applications — six times the number from 1965. That volume invites mistakes, which bad actors exploit to stifle competition. Almost half of all disputed patents end up being declared invalid. Clearly, the system isn’t working as it should. When disputes arise, they land in one of three venues: the U.S. International Trade Commission (ITC), federal courts, or the Patent Trial and Appeal Board (PTAB). Each venue plays a different role, but the ITC has become a magnet for “patent trolls” — companies that buy up patents not to innovate but to weaponize them against productive businesses. Unlike the PTAB, which uses strict criteria to weed out weak claims, the ITC rarely denies a case. Worse, its decisions often result in exclusion orders — bans on importing products that allegedly infringe patents — even if the claims are dubious. This heavy-handed approach makes it easier for trolls to use litigation as a blunt tool to extort settlements from actual innovators. The PTAB, by contrast, offers a more balanced solution. Its stringent review process focuses on merit, reducing frivolous claims while maintaining an accurate, science-based dispute approach. On average, PTAB cases are less expensive and time-consuming than ITC investigations or federal court battles. Why does this matter for AI? Because innovation thrives on competition and freedom. When innovators face barriers like high litigation costs or the threat of exclusion orders, resources that could go toward research and development instead fund legal defenses. Worse, the uncertainty around patents creates a chilling effect, deterring entrepreneurs from entering the field. In a global economy where nations like China aggressively advance their AI capabilities, America can’t afford to let bureaucratic inefficiencies shackle its innovators. The solution is clear: streamline the patent system to protect property rights while minimizing potential abuse. This means limiting the ITC’s authority to handle patent disputes and bolstering the PTAB’s capacity to review questionable patents. We can reduce unnecessary burdens on businesses and consumers by ensuring disputes are resolved quickly and fairly by promoting competition. AI is too important to let regulatory dysfunction stand in the way. If we want America to remain the global leader in technology, we need to prioritize innovation over litigation. The patent system should be a springboard for progress, not a roadblock. Let’s get government out of the way and let entrepreneurs do what they do best: solve problems, create value, and make the future brighter for everyone. Originally published at The Daily Economy.
Driven by progressive policies that stifled growth and burdened Americans with skyrocketing debt, elevated inflation, and economic malaise, has President Biden’s administration cemented its economic legacy as a failure? Despite promises of a “build back better” economy, the results are troubling, with policies rooted in overspending, overtaxing, and overregulating, pushing many Americans further from prosperity. Under President Biden, the national debt grew substantially, especially without a war or pandemic, surging past $36 trillion — a staggering $10 trillion increase since 2020. This debt explosion stemmed from massive spending initiatives, including the American Rescue Plan Act, the so-called Inflation Reduction Act, and many other reckless spending packages. Far from stimulating growth, this spending fueled inflation and undermined economic stability. The Federal Reserve, charged with combating inflation, was forced to hike interest rates at a record pace, raising the federal funds rate from near zero to over five percent in just two years. These hikes directly responded to the monetary inflation crisis created by the Federal Reserve and exacerbated by Biden’s profligate fiscal policies. While interest rates have come down some over the last year, Americans face higher borrowing costs for homes, cars, and businesses, squeezing family budgets and discouraging investment. Though there are signs of an economic recovery, real weekly earnings have declined by two percent since Biden took office as inflation outpaced wage growth for most of his presidency. This decline in purchasing power disproportionately hurts low- and middle-income households, the very groups progressive policies claim to champion. Adding to the economic woes is a labor market hampered by a declining labor force participation rate. While the unemployment rate appears low at around four percent, this masks the reality that millions of Americans remain out of the workforce. Policies that disincentivize work — such as enhanced unemployment benefits, expanded welfare programs, and increased regulatory burdens on businesses — have created a perfect storm of lower productivity and higher dependency on government programs. Regulatory overreach has further compounded economic challenges. According to the American Action Forum, the Biden administration issued $1.8 trillion in costly final rules, making it one of the most regulatory-heavy administrations in US history. These rules, which include onerous environmental regulations, expansive labor mandates, and restrictions on energy production, acted as a hidden tax on us. They drove driven up costs for businesses and consumers. The administration’s war on artificial intelligence (AI) and corporate mergers were among the most damaging regulatory efforts. The Federal Trade Commission (FTC) and Department of Justice (DOJ) aggressively sought to stifle innovation and business growth under the guise of protecting competition through antitrust action. Instead of fostering a dynamic economy, these agencies created a climate of uncertainty that discourages investment in new technologies and impedes market efficiency. AI, which holds transformative potential for economic growth, was targeted with heavy-handed oversight that risks driving innovation overseas. One of the most glaring examples of regulatory overreach was the Biden administration’s stance on mergers and acquisitions (M&A). The FTC and DOJ adopted a hostile posture toward M&A activity, essential for fostering business growth and increasing efficiency. By blocking mergers without sound economic justification, these agencies undermined businesses and sent a chilling message to investors. Such interference in private-sector decisions contradicted free-market capitalism and harmed the economy by stifling growth opportunities. Similarly, the administration’s push for sweeping regulations on artificial intelligence threatened to derail a promising industry. Instead of embracing AI as a tool for economic advancement, the administration appeared intent on imposing burdensome compliance requirements that would discourage innovation and reduce America’s competitiveness on the global stage. The path to reversing this economic malaise lies in rejecting the overspending, overtaxing, and overregulating policies that define Bidenomics. President Trump and Congress must prioritize fiscal discipline by cutting government spending to at least pre-pandemic levels and limiting it to sustainable levels. This should be done through a strict fiscal rule that caps expenditure growth at a maximum rate of population growth plus inflation. Spending less can alleviate the debt burden that threatens future generations. Second, tax reform should focus on lowering tax rates, broadening the base, and simplifying the tax code to incentivize work, investment, and innovation. High taxes discourage productivity and entrepreneurship, while a pro-growth tax system can unlock the potential of American workers and businesses. Third, regulatory reform is essential to restoring economic freedom and unleashing the full potential of the private sector. This includes reining in agencies like the FTC and DOJ, which have overstepped their bounds in pursuing ideological goals at the expense of economic progress. It also means adopting a balanced approach to AI governance that promotes innovation while addressing legitimate concerns without stifling progress. The economic legacy of Bidenomics will be remembered as a cautionary tale of how progressive policies undermine prosperity. The administration’s decisions imposed significant costs on the American people, from an explosion in national debt to inflation, higher interest rates, regulatory overreach, and declining real wages. Voters chose a different direction with Trump. The better approach is returning to the principles that have historically driven American prosperity: limited government, fiscal responsibility, and economic freedom. By embracing these principles, we can chart a path toward sustainable growth, higher living standards, and greater opportunities for all Americans. Following President Trump’s inauguration, numerous updates and Executive Orders have been issued. All eyes are on the White House for the policy reforms ahead. I’m incredibly excited about opportunities for the new administration to restore American leadership in technology and reverse the damage of Biden’s antitrust efforts. At the same time, we can’t overlook the state and local actions, especially the growing movement to reform property taxes. These are critical policy shifts that could help people prosper in 2025.
Thanks for joining me in this episode of "This Week's Economy." For more insights, visit vanceginn.com and get even greater value with a paid subscription to my Substack newsletter at vanceginn.substack.com. |
Vance Ginn, Ph.D.
|