The 4% Solution: Unleashing The Economic Growth America Needs by The Bush Institute and Brendan Miniter is a treatise on growing the economy beyond the 2.3% rate in recent years which is below the average of the previous six decades. The authors look toward a 4% growth in GDP on a sustained basis.
The challenge is to grow economies at a high level without excessive industrial pollution as a consequence. This challenge can be met best with incremental industrial progress in solar energy, fusion power, coal gasification and other energy modalities in varying stages of research and development. The authors should have spent more time discussing these aspects.
The blueprint of the book unfolds by lowering the debt of the United States and allowing hard workers to exploit opportunities. Past years have shown that higher growth tends to reduce debt because larger tax receipts are received in response to more people working. The other debt component is to control the government spending within growth increments of the GDP.
Economic growth was greatest in the United States from 1950 – 2008. The highest growth in GDP was in the United States, Great Britain, Germany, Italy and Japan. Today, despite a host of challenges, prosperity in the United States exceeds much of Europe by 40%.
The authors point toward the top professions as agents for boosting the GDP. Along with the professions are highly educated people with degrees; such as, PhD, Masters, Bachelors and Associates. Computer related industries grew from $200 billion dollars in ’77 to $1.6 trillion dollars by ’07. These industries are telecommunications, systems design, data processing, publishing, computer and electronic products and services. The presentation should cover the employment of the blue collar work force to repair the infrastructure of the United States.
According to the authors, the top United States exports are operating leases, film, television, law, mining, engineering, education, finance, medicine, repair of equipment, industrial engineering , consulting and travel. The book explains that free markets encourage workers, companies and investors to undertake more productive activities.
Free markets do require some regulation to protect consumers and prevent too much leveraging in the stock market, as well as discouraging risky practices in derivative transactions. At a minimnum, the derivative transactions should be dealt with comprehensively by supplementing the Uniform Commercial Code. These issues could have been dealt with more extensively in the presentation.
The authors support the idea of a lower federal debt with increments in property taxes for immovable property, higher consumption taxes and a fairer collection scheme for personal income taxes. The sum total of doing these things would equate to a pro–growth policy implementation according to the authors. Also, taxing the underground economy is another noteworthy idea.
The 4% Solution has some important contributions to make with regard to the ongoing debate on the economy. The discussion on free markets is subject to the cooperation the United States gets from its trading partners. The idea of lowering the federal debt will be partially dependent upon the United States staying out of future foreign entanglements and wars.
In addition, the population in the United States has been growing by nearly a million people a year beyond the death rate. Ultimately, government planners must examine whether or not this growth rate in population is sustainable for the long term. The book doesn’t place much emphasis on this area.
The authors don’t have enough discussion on the need to upgrade a failing infrastructure which has required attention for decades. Saving Medicare and Medicaid would be simpler to do by reducing the cravings Americans have for junk food along with a tendency to function without daily exercise. Perhaps, the best way out of the junk food albatross is to raise excess consumption taxes to fund the public health care programs. To its credit, the Bush Institute has left increments in consumption taxes on the table as a policy option. This book deserves some consideration on the merits with the inclusion of the provisos listed above.