The U.S. economy grew at a 2 percent annualized rate in the third quarter of 2021, the slowest increase since the close of the 2020 recession. CEI’s Ryan Young urges Congress and state government leaders to resist the urge to spend more and, instead, focus on removing barriers to recovery.
Statement by CEI Senior Fellow Ryan Young:
“The good news is that GDP growth had already bounced back to roughly where it would have been without Covid. Booster shots for adults and vaccinations for children 5 and up will help fight COVID and let people open back up, at least to the extent that people use them.
“The bad news is that Congress is taking the wrong measures to address the recovery, and inflation will likely remain high for the foreseeable future. If the big spending bills pass, they will use up as much as $3 trillion of capital that instead could have helped struggling businesses, boosted consumer spending, and paid down debts. This is nearly 15 percent of U.S. GDP. Those scarce resources will instead be spent on political projects, most of which are COVID-unrelated.
“Congress and state legislatures should spend less and turn instead to lifting regulatory barriers, many never needed in the first place. Roughly a quarter of all jobs now require some sort of occupational license, up from about 5 percent 60 years ago. Think how many capable workers are left out because they can’t afford the fees and classes, many of which existing businesses put in place specifically to keep competitors out. Trade barriers, which roughly doubled under the Trump administration, are a major contributor to today’s supply network problems. Financial regulations make it difficult for small businesses to get loans they need to stay afloat or grow. There is much to do, if Congress would get its priorities straight.”