All year, everyone wanted to know where Uncle Sam was going. Promises, polarization and politics aside, Donald Trump, the President-elect of the United States, has several challenges ahead.
Peter Lefkin, the senior vice president of government and external affairs at Allianz of America Corporation, on the top five issues that need his undivided attention...
Infrastructure investments: The U.S. economy stands to benefit greatly from a committed infrastructure program. Build and repair roads, bridges, airports, train lines. A great system was built in the 1960s and 70s but it was not maintained as well as it should have been. Infrastructure spending will help reduce the congestion that has become a part of daily life for many Americans in major cities. It will also create long- and short-term jobs, in a further boost to the economy.
Budget deficit: For over 16 years, the United States has been largely unconcerned about its budget deficit issues while its gross national debt has surged by more than 350 percent, to almost $20 trillion today from roughly $6 trillion in 2000. Last year, the budget deficit rose to $588 billion from $440 billion. In the next four years odd, the deficit is projected to hit $1 trillion as the population ages and interest rates on U.S. debt rise. Large deficits and growing interest costs crowd out other expenditure such as on defense, education, social welfare and infrastructure. So, the party must end and the bills must be paid. No nation, even the United States with all its wealth, can continue to borrow money forever.
Climate change: It is important for the United States to lead in this effort. The problem of climate change is not going away. Americans are more divided on this issue than Europeans, with some fearing that reducing carbon emissions might hurt the country’s oil, coal and manufacturing sectors. However, other nations have shown that economic growth and efforts to reduce carbon emissions do not have to be in conflict. If the issue of climate change is not tackled, more intense extreme weather events such as hurricanes could threaten lives and property.
Regulation: Trump will have to fight pressure to politicize the Federal Reserve and the Securities and Exchange Commission. At the same time, regulation has to be made less complex and be driven by market forces to promote societal goals. Laws and regulations establish the framework of how businesses operate and companies support clear, consistent rules and enforcement. However, thousand-page regulations have become commonplace and this is overwhelming. Like Winston Churchill once said, ten thousand regulations destroy respect for the law. Achieving the right balance is key.
Growth and the middle class: During most of the post-Second World War era, the U.S. economy grew about 3-4 percent annually. Since 2000, growth has slowed to around 2 percent and incomes have been largely stagnant for the U.S. middle class. This is creating economic and social pressures. The government must work to ensure that students and workers have the skill sets needed to navigate a post-industrial 21st century economy.