MM#395--How to Grow the Economy, pt 2: Fix America's Economic Engine

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The American economy is running like a race car at half speed, averaging just 1.8% GDP growth over the past two decades when it should be soaring at 3% or higher. This sluggish performance isn't inevitable – it's the result of specific policy choices that have weighed down our economic engine.

Using a powerful race car analogy, we explore how tax cuts function as essential engine maintenance for the economy, while excessive government spending adds unnecessary weight that drags down performance. The current initiatives to trim bureaucratic waste through the Department of Government Efficiency represent steps in the right direction, but decades of congressional neglect in oversight responsibilities have allowed inefficiencies to multiply unchecked.

Monetary policy plays a crucial role as the fuel for our economic engine. We examine Steve Forbes' compelling argument for returning to the gold standard in his book "Inflation" – a policy that historically coincided with America's greatest periods of prosperity and near-full employment. During the late 1800s under the classical gold standard, more wealth was created than in all previous centuries combined. Similarly, both the 1920s and 1960s saw unemployment rates below 5% when the dollar was pegged to gold. While the political will for such a fundamental reform seems absent today, the historical evidence suggests we should at least aim to keep inflation consistently below 3%.

As we approach America's 250th anniversary in 2026, we have a unique opportunity to implement policies that will restore robust economic growth. By properly maintaining our economic engine through tax cuts, providing clean fuel through sound monetary policy, and removing excess weight through spending discipline, we can get America's race car humming at full capacity again – creating opportunity and advancement for all Americans. What policies do you think would best accelerate our economic growth?

Key Points from the Episode:

• Tax cuts are essential to fix the economic engine and bring investment back to America
• Excessive government spending acts as dead weight on the economy, requiring immediate reduction
• Agencies often stonewall congressional oversight, perpetuating waste and inefficiency
• Steve Forbes advocates returning to the gold standard to eliminate inflation and stabilize currency
• During gold standard periods, America experienced robust growth and near-full employment
• Whipping inflation requires supply-side solutions rather than just interest rate manipulation
• The US needs consistent 3%+ GDP growth annually, not the 1.8% average of the past two decades
• Tariffs and trade policy are like tires - important but not the first priority for economic repair
• The Federal Reserve's fuel quality (monetary policy) needs significant improvement

Be sure to check out our show page at teammojoacademy.com, where you'll find everything discussed in this podcast as well as other great resources.

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