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President Biden’s tenure left a legacy of regulatory overreach and heavy-handed policies that stifled economic growth, distorted markets, and limited opportunities for individuals and businesses. From blocking domestic energy production to expanding government control over financial markets, these actions prioritized central planning over innovation and prosperity. Now, the Trump administration and a Republican-led Congress have an opportunity to reverse these harmful policies and unleash Americans’ full potential. A glaring example of Biden’s missteps was the Consumer Financial Protection Bureau’s (CFPB) regulation barring medical debt from factoring into credit scores. While framed as consumer protection, the policy undermined the reliability of credit scores, making it harder for lenders to assess risk and potentially restricting access to credit for those who need it most. This approach mirrored the broader pattern of fiscal irresponsibility under Biden, including costly handouts like student loan forgiveness and expanded Social Security payments for many government workers. These measures exacerbated the nation’s debt crisis while failing to address systemic challenges, creating moral hazards and rewarding select groups at taxpayers’ expense. Could Washington help chart a different course by prioritizing free enterprise and limited government? A key starting point is repealing or revising harmful regulations, particularly those enacted under Dodd-Frank. While intended to stabilize the financial system after the 2008 Great Financial Crisis (GFC), Dodd-Frank entrenched “too big to fail” institutions, burdened small banks and credit unions with costly compliance requirements, and reduced competition. Tailoring regulations to reflect financial institutions' size and risk profiles would empower community banks to serve local businesses and families better. Revisiting restrictive provisions like the Volcker Rule could also enhance liquidity and investment without compromising stability. Reforms to monetary policy are equally urgent. During the pandemic, the Federal Reserve’s unprecedented balance sheet expansion injected uncertainty into markets and raised questions about its role in the economy. Adopting a rules-based monetary policy, such as limiting the Fed’s balance sheet to no more than 6% of GDP as before the GFC, would restore transparency and market confidence. Congress should also limit the Fed’s emergency powers, ensure it remains a true lender of last resort, and conduct a full audit to promote accountability. Such steps would provide a stable foundation for less malinvestments until we can end the Fed. The financial technology (fintech) sector offers tremendous promise for expanding access to financial services, reducing costs, and driving innovation. Yet regulatory uncertainty surrounding blockchain and digital assets continues to stifle progress. Congress should take a hands-off approach to fintech and focus regulation on fraud prevention rather than impeding innovation. Removing barriers to peer-to-peer lending, digital payments, and crowdfunding platforms will empower consumers, foster competition, and unlock economic opportunities. Housing finance reform is another critical priority. More than a decade after the GFC, Fannie Mae and Freddie Mac remain under government conservatorship, perpetuating a system of implicit taxpayer guarantees incentivizing risky lending. Privatizing these entities would reduce taxpayer exposure and restore discipline to housing markets. Additionally, federal housing programs through the Housing and Urban Development program that encourage over-leveraged homeownership must be reevaluated to prevent future instability and ensure a sustainable market driven by supply and demand, not government distortions. The Trump administration must also end the harmful practice of government bailouts. Propping up failing institutions creates a moral hazard, signaling to firms that they can take excessive risks without facing the consequences. Instead, Congress should establish clear, market-oriented bankruptcy procedures that ensure no institution is “too big to fail.” This approach would protect taxpayers, promote accountability, and maintain financial stability. Washington could help restore financial freedom and create a dynamic, inclusive economy by reversing Biden's interventionist agenda and implementing these reforms. Rolling back harmful regulations, adopting a rules-based monetary policy, fostering fintech innovation, privatizing housing finance, and ending bailouts will empower individuals and businesses to innovate, compete, and prosper. The Competitive Enterprise Institute’s report, Free to Prosper: A Pro-Growth Agenda for the 119th Congress, provides actionable strategies for achieving these goals. America’s financial system thrives when markets are free, incentives are aligned, and individuals have the opportunity to prosper. It’s time to embrace these principles and put the U.S. back on a path to lasting economic success.
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Vance Ginn, Ph.D.
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