​In episode 77 of This Week's Economy, I break down the flawed economic promises of presidential candidates who ignore that nothing is truly free. From proposed AI regulations and fracking policies to tax plans and protectionism, I explore the impact these issues have on innovation, energy independence, and economic growth while highlighting why free-market solutions are key to prosperity. Get the show notes and more information at vanceginn.substack.com.

​Check out episode 76 of This Week's Economy. I discuss whether the Fed will cut interest rates, the anti-growth message by Harris-Walz, problems with tariffs by Trump-Vance, support by RFK, Jr. of Trump, school choice in Texas, and a boom in cities in red states, and much more. Get the show notes at vanceginn.substack.com.

​Don’t miss episode 75 of This Week's Economy. I discuss price controls and handouts to Americans being pushed by Harris and, in some ways, Trump, free-market energy policies in states, whether Google should be broken up, the economy being a top election issue, income tax elimination in Louisiana, and a state-level jobs report after Hurricane Beryl.

Get show notes in my newsletter and subscribe to vanceginn.substack.com.

​Economist Vance Ginn joined "The Joe Pags Show" to highlight the stark contrasts between a Trump-led economy and the current Biden/Harris administration's approach.

Ginn began by criticizing the Democrats' anti-growth agenda, pointing out the dangers of Kamala Harris’s push for price controls, which he argued would hurt businesses and raise costs for consumers. He explained that the Biden/Harris administration has been increasing the national debt at an alarming rate, and excessive spending remains the top issue facing America. Ginn expressed concern over Harris's plans to continue this trend, warning that it could further destabilize the economy.

On taxes, Ginn highlighted Harris’s proposal to raise corporate tax rates to 28%, which he said would lead to business closures, reduced hiring, and companies moving operations overseas. In contrast, Trump’s focus on deregulation and lower taxes helped the economy thrive before the pandemic. Ginn suggested that if Trump wins in 2024, his administration would likely prioritize deregulation and tax cuts to boost economic growth.

The conversation also covered global trade and supply chain issues, with Ginn advocating for a balanced approach that promotes U.S. production by reducing regulations. He concluded by comparing Trump’s and Harris's stances on economic issues like eliminating taxes on tips, emphasizing the broader economic philosophies at play.

To hear Vance Ginn’s full interview with Joe Pags, click the link below.
https://news.iheart.com/featured/the-joe-pags-show/content/2024-08-22-trump-vs-bidenharris-economy-explained-by-vance-ginn/

​Join me for Episode 109 of the Let People Prosper Show to hear how deregulation, tax cuts, and federalism were the keys of Trumponomics but how protectionism and immigration policies got in the way of a pro-growth future with Steve Moore, an economist and author, serving as a senior fellow at the Heritage Foundation and a co-founder of The Committee to Unleash Prosperity, and author of Trumponomics: Inside the America First Plan to Revive Our Economy.

Subscribe, share, and rate the Let People Prosper Show, and visit vanceginn.com for more insights.

My interview with Lars Larson Show.

​Campaigns step up cryptocurrency plans @VanceGinn reacts...DON'T MISS IT!

Originally published at The Hill. 

​Former President Donald Trump’s proposal to exempt tips from federal income and payroll taxes might sound like a windfall for service workers, but it’s a costly illusion that undermines fair tax policy and economic efficiency. This plan, proposed as legislation by Sen. Ted Cruz (R-Texas), designed to appeal to a crucial voter base, exacerbates inequities and distorts the tax system. There’s a better way.

The core problem with exempting tips from taxes is that it narrows the tax base, leading to potential hikes in overall tax rates on tipped workers and everyone else to compensate for deficit spending. A broad tax base with low rates is essential for minimizing economic distortions and spreading the tax burden fairly. Narrowing the base by exempting tips would shift the burden to non-exempt income earners, creating an uneven playing field and violating sound tax policy.

This proposal picks tipped workers as winners over everyone else, incentivizing more tipped jobs and payments. Today, nearly every payment app prompts users for tips, a practice that could proliferate further under such a tax exemption. This disrupts consumer behavior and distorts the labor market by artificially boosting the attractiveness of tipped positions over other roles, regardless of the actual economic value they generate.

Moreover, this policy would discourage employers from raising the base wages of tipped employees. The federal minimum wage for tipped workers has stagnated at $2.13 per hour since 1991, and making tips tax-exempt might reduce the pressure to increase this base wage by employers, harming the workers it aims to help.

Fiscal implications are significant. Estimates suggest exempting tips could reduce federal revenue by $150 to $250 billion over a decade. This shortfall requires higher taxes on other income forms or cuts to public services. Additionally, the potential for increased tax avoidance, as employers and employees reclassify wages as tips, would complicate tax administration and enforcement.

A more effective approach would be to make the individual income tax cuts from the 2017 Tax Cuts and Jobs Act permanent, as they expire next year. Coupled with broadening the tax base and lowering rates, this would create a more efficient and equitable tax system. Reducing or eventually eliminating corporate income taxes could stimulate investment and economic growth, benefiting a broader range of Americans.

Milton Friedman, the renowned free-market economist, advocated for a broad-based tax system with low rates and minimal exemptions. His philosophy centered on minimizing government intervention and ensuring tax policies do not distort economic decisions. Focusing on permanent tax cuts and broader reforms can create a more robust and fair economic environment that truly benefits all workers.

Addressing excessive government spending, which has contributed significantly to our fiscal crisis, is also crucial and missing from Trump’s proposal. Neither Trump nor many Republicans seem to be advocating for significant spending cuts these days. Committing to reducing government expenditures would help manage the fiscal crisis and boost economic growth and prosperity by leaving more resources in the hands of individuals and businesses.

While Trump’s proposal might seem appealing, it fails to address deeper issues within the tax system and the labor market for service workers. A broad-based tax system with low rates and minimal exemptions and less government spending is a more equitable and efficient approach that would support more prosperity than exempting tips from federal taxes.

​In the Energy News Beat - Conversation in Energy with Stuart Turley, Dr. Vance Ginn is interviewed about various pressing economic and political issues. They discuss the recent presidential debate, the state of the U.S. economy, the implications of red-state policies on job growth, and the impact of high energy costs on inflation. The conversation also covers the importance of school choice, immigration reform, Supreme Court rulings on free speech, the Chevron Supreme deference Court decision on regulatory issues, and the challenges of achieving net zero emissions amidst global economic shifts. Dr. Ginn emphasizes the need for sound financial policies and reducing government spending.


Please follow Vance on his substack HERE: https://vanceginn.substack.com/. It is a great source of finance and political insights. 


Vance, I would like to have you back and on the 3 Podcasters Walk into a Bar with David Blackmon and Rey Trevio. - Thanks again for your time, and talk soon - Stu 

Originally published at AIER. 

​The US economy faces numerous challenges, exacerbated by policy uncertainty and excessive government intervention. Milton Friedman famously said, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” This sharp observation underscores the inefficiencies often associated with government intervention. Instead, we should advocate for free-market solutions that empower individuals and businesses to drive innovation and growth.

Election years heighten policy uncertainty, driving economic volatility. Businesses and investors become cautious, waiting to see which policies will prevail. This hesitation can slow economic activity, affecting job creation and investment in new projects. More than half of Americans think we are in a recession even when the headline data say otherwise, reflecting a disconnect between reported statistics and personal experiences.

Policy uncertainty during election years exacerbates these issues. The upcoming elections could significantly impact economic policies, depending on the direction taken by the administration. Whether it’s Biden’s continued interventionist policies or a shift under Trump, the stakes are high. Businesses, investors, and consumers are left guessing, which stalls responsible decision-making and hampers economic growth. 

The recent meeting of the Business Roundtable highlighted these concerns as both Biden and Trump pitched their economic visions. According to the Tax Foundation, Biden’s tax plan, which includes increases on corporations and the wealthy, could reduce GDP by 2.2 percent and eliminate 788,000 jobs over time. On the other hand, Trump’s tariff proposals that hike taxes on Americans would have economic consequences, increasing consumer prices and reducing household incomes.

The Federal Reserve’s decisions also play a crucial role in shaping the economic landscape. Recent hikes in interest rates to curb inflation have added another layer of uncertainty. Higher borrowing costs can dampen consumer spending and business investment, slowing economic growth. The Fed’s policy trajectory remains uncertain, contributing to a cautious outlook among businesses and investors.

Biden’s regulatory approach further complicates matters. His administration has introduced numerous regulations affecting various sectors, from energy to finance. While intended to address climate change and market stability, these regulations often have significant compliance costs and operational challenges. The regulatory burden can stifle innovation and deter investment, particularly in industries struggling with economic headwinds.

Another key aspect is the role of institutions. Friedrich Hayek, in his seminal work “The Road to Serfdom,” cautioned against the overreach of central planning. He emphasized that central planning often leads to inefficiencies and a loss of individual freedoms. His insights are particularly relevant today as we navigate the complexities of modern economies. To truly flourish, governments should embrace free-market capitalism and resist the creeping influence of socialism.

This principle applies across sectors. By focusing on the efficient use of resources, reducing regulatory burdens, and fostering competition, we can build a more prosperous future. The bottom-up approach ensures better utilization of resources and empowers entrepreneurs, businesses, and local communities. Policies such as eliminating unnecessary regulations, reducing corporate tax rates, and promoting school choice are vital. These policies drive economic growth and ensure that resources are used where they are most needed.

Policy uncertainty during election years can create a precarious economic environment. Given the numerous issues in Washington, states must lead the way in our system of federalism. The increasing divergence between red and blue states on taxes, labor, and education highlights this trend. Red states cut taxes and promote business-friendly policies, while blue states often expand government programs. This divergence allows states to set examples of effective governance through free-market principles. By reducing regulatory burdens, passing sustainable budgets, and fostering competition, states can mitigate some national policy uncertainties that stall economic progress.

The next big step in federalism involves states innovating beyond traditional policies. For instance, states should focus on restraining government spending, eliminating bad taxes like income taxes, and reducing onerous regulations. Policies promoting school choice can also drive education reform and better outcomes, ensuring that all children have access to quality education regardless of their socioeconomic background. In addition, more freedom in technology and innovation should be ensured to support the next big revolution that improves our lives and livelihoods.

To move forward, we must build from our past experiences and rise to overcome obstacles. We can foster innovation and resilience by acknowledging and learning from our failures. It’s essential to recognize that failure provides valuable lessons and opportunities for growth. Expanding government intervention in response to failures often stifles this learning process and leads to greater inefficiencies.

Policy uncertainty during election years can create a precarious economic environment. States must lead the way in our system of federalism, setting examples of effective governance through free-market principles. By passing sustainable budgets, reducing regulatory burdens, and fostering competition, states can mitigate some national policy uncertainties that stall economic progress.

Let’s leverage the strengths of the free market, prioritize efficiency, and ensure that our policies truly benefit Americans. By embracing free-market principles, reducing regulatory burdens, and fostering competition, we can pave the way for a stronger and more prosperous America. Together, we can build a future where smart policies and strong institutions that support life, liberty, and property pave the way for economic resilience and growth.

Originally published at AIER. 

​Both major presidential candidates, Joe Biden and Donald Trump, have leaned towards protectionism, a stance recently echoed by Terry Schilling in The American Conservative. Unfortunately, this perspective misses the mark. 

Protectionism is not the solution to revitalize American manufacturing or the economy. The real culprits are flawed internal policies — excessive government spending, high taxes, and stringent regulations — that stifle growth and innovation.

Politicians from both sides of the aisle often scapegoat countries like China and Mexico for the decline in US manufacturing. This narrative overlooks reality. 

Technological advancements and productivity gains are the primary drivers of change in manufacturing, and that’s a good thing for the many beneficiaries at the expense of the few. Industrial production in manufacturing has remained relatively flat, indicating stable output despite economic fluctuations, while manufacturing employment has declined significantly, reflecting the sector’s increased productivity and automation.

In short, we don’t need as many hard jobs to provide the same output, and those displaced individuals can find better avenues to flourish, even with tough transitions. While it would be great if there were a way to protect everyone’s job, this is a fool’s errand resulting in control by politicians and bureaucrats in government at the expense of everyone else. 

Free-market capitalism is needed now more than ever, not big-government socialism, which is already sending us down the road to serfdom. American manufacturing’s decline is largely due to domestic policies that reject free-market capitalism, thereby hindering economic growth. 

Progressive policies have led to excessive government spending, high taxes, and overregulation. The federal government is spending about 25 percent of GDP and running nearly $2 trillion deficits, including paying about $1 trillion in net interest payments annually, even with record-high tax collections. Add to this how the Competitive Enterprise Institute reports federal regulations cost the US economy $1.9 trillion annually, equivalent to 7 percent of GDP. Spending and regulations shackle about one-third of our economy, creating perverse incentives for businesses and workers to compete and innovate. 

The Trump administration’s efforts to boost manufacturing through tariffs led to trade wars that aimed to bring jobs back to the US. These measures backfired, however, increasing costs for American businesses and consumers, as tariffs are just taxes on Americans. Manufacturing output saw little sustained improvement, and employment gains were modest and short-lived. 

Deficit spending, which contributed to an appreciated currency from foreigners’ demand for the US dollar, made it cheaper to purchase foreign goods, exacerbating the trade deficit. The trade deficit expanded even after Trump imposed tariffs on Chinese goods. Similarly, the Biden administration’s attempts to revitalize the sector through initiatives like the American Jobs Plan and the Inflation Reduction Act have yet to do more than drive up the deficit and prop up specific markets. 

Despite potentially good intentions, these policies have yet to deliver the promised results, often perpetuating the same issues of overregulation and high spending.

The United States-Mexico-Canada Agreement (USMCA), which replaced NAFTA and mentioned in the piece, introduced more protectionist measures than its predecessor. The USMCA’s stringent labor and content rules have complicated trade and increased production costs, undermining its effectiveness in promoting free trade. These provisions counter what should have been done to promote more trade and prosperity.

It is wise to remember that free trade has provided the best opportunities for people to prosper and has significantly reduced extreme poverty globally, including in China. 

America should not isolate itself from other countries, as we benefit from a growing global demand for our products and the supply of goods we can purchase from abroad. Consumers and producers in America are better off with more domestic and international trade. As we don’t want to produce everything we consume daily, trading with others is the most efficient way to meet our needs.

Our national debt, driven by excessive government spending, is a significant economic burden. This debt will continue to grow without the resolve to cut spending and implement a strong spending limit. The Federal Reserve’s monetary policy, which has reduced purchasing power and higher inflation, also impacts manufacturing and should be regulated through a monetary rule. 

The PROVE IT Act aims to ensure that carbon emissions from imports are accurately measured. Still, the underlying assumption of a need to tax carbon dioxide — a necessary component of life — is flawed. Pigouvian taxes are problematic because they often target the wrong factors at incorrect tax rates, essentially serving as tools for government overreach rather than effective economic policy. 

The focus should be on minimizing government control over economic actions, which create more problems. A carbon tax or one of its spinoffs is a misguided attempt to control what the EPA doesn’t consider a pollutant, leading to worse outcomes for everyone, especially the poor.

Another way to improve relationships with countries and put more collective pressure on China to liberalize while meeting the needs of consumers and producers in America would have been to approve a version of the Trans-Pacific Partnership (TPP). 

This trade agreement negotiated by the Obama administration allowed expanded free trade with 11 other Asia-Pacific countries (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam). By partnering with multiple countries, America could have promoted free trade practices that fostered a more robust economic environment that competes with China, Russia, and other potential adversaries. 

The TPP, as detailed by the Council on Foreign Relations, aims to enhance trade and economic integration across the Asia-Pacific region, providing significant benefits to all member nations. The TPP would reduce tariffs, establish common trade standards, and open new markets for American goods and services, ultimately leading to greater economic growth and job creation at home. 

Unfortunately, Trump rejected the TPP when he took office in 2017 instead of trying to negotiate the TPP better. While America was left out, the other 11 countries joined trade agreements after TPP’s demise, a major setback for Americans that could have been avoided.

Revitalizing American manufacturing requires addressing internal policy failures rather than blaming foreign competition.

We can ensure long-term prosperity by reducing government interference, embracing free trade, and fostering a competitive environment. The better path forward with fewer trade-offs lies in free-market principles, which have the power to drive innovation, efficiency, and economic growth. 

It’s time to shift the focus from protectionism to fostering a robust, open market that benefits everyone.