Commentary & Op-Eds

THE WALL STREET JOURNAL – The Economic Debate We’re Not Having

What’s missing in today’s presidential race is a discussion about economic priorities in relation to the sort of future we wish to have.
 
The debate about the economy in the current presidential race is notable mostly for how backward-looking it is. Bernie Sanders gives us a pining fantasy of a European welfare state, while Hillary Clinton speaks of a grab bag of small changes for the middle class. Donald Trump offers up angry declarations against free trade and smart immigration—both of them long-standing pillars of conservative economic policy. As for the more traditional Republicans in the race, several have emphasized pro-growth themes (especially Jeb Bush, whom I advise), but this unconventional election season has drawn their attention elsewhere. 
 
What’s missing is the big question of how to think about economic priorities in relation to the sort of future we wish to have. The federal budget of the not-so-distant future will be dominated by interest payments on the debt and by entitlement spending. As a result, we will have to invest less in defense, education, training, research and infrastructure—the sort of public goods that a future-oriented society needs. Such investments not only raise gross domestic product and incomes; they help to ensure that prosperity is widely shared and that American society continues to reward work and innovation. 
 
The peril of policies so anchored in the past is visible today in the economic struggles of Europe, where both growth and inclusion have fallen off dramatically. In many European economies, high social spending and debt service have limited not just economic growth but spending in crucial areas like defense and support for work and training. Those lucky enough to have protected jobs are increasingly confronted by have-nots—largely younger workers battling for a place at the economic table. 
 
To avoid this fate in the U.S., we must find a way forward that avoids both the politics of resentment and an unaffordable welfare state. The silver lining in the success of today’s antiestablishment candidates, on the left and the right, may be that we will finally shift to the sort of debate we need to have, about escaping the destructive economic legacies of the past and creating real economic opportunity for the future.