September 27, 2021
Center for American Prosperity
Center for American Prosperity Overview
September 27, 2021
The economic success of the Nation is driven by the individual will and genius of free men and women aspiring to achieve their dreams and further prosperity for themselves and their families. Our Nation declared its independence in part because of a system of commerce that did not put the prosperity of Americans first and hindered, rather than embraced, the individual aspirations of Americans. In establishing a new nation in such form to affect the “Safety and Happiness” (U.S., 1776) of American citizens, our Founding Fathers sought to unleash the power of entrepreneurship and free enterprise so that Americans “who are possessed of the spirit of Commerce—who see and who will pursue their advantages, may atchieve (sic) almost anything” (Washington, 1784). The America First Policy Institute’s Center for American Prosperity is dedicated to advancing public policy that puts the prosperity of American citizens first, to restoring and preserving the American free enterprise system, to defending American workers and their families, to promoting growth that lifts up forgotten communities, and to celebrating the innovative spirit of the American people.
The history of American prosperity was shaped by great entrepreneurs—from the Wright Brothers, Henry Ford, and Thomas Edison—just as much as it was shaped by the relentless efforts of the residents of Kitty Hawk who aided the First Flight, the workers assembling millions of Model T cars, and the brave linemen who first brought electricity to thousands of homes. The future of American prosperity depends on ensuring the entrepreneurs of today and tomorrow are free to “pursue their
W H E R E A M E R I C A I S N O W
The future trajectory of American prosperity sits at a crossroads. Divergent views exist across the spectrum of economic policy, including the relationship between the public and private sectors, taxation, regulation, government spending, and trade. The path we take as a Nation will define our future. On the heels of the most severe negative economic shock since the Great Depression, despite a swift and strong recovery from the pandemic, long-term challenges remain that call for a strategic response grounded in principled and evidencebased policy solutions.
If the current America returns to the failed policies of the past, rather than building on the transformative economic policies of 2017 to 2020, the next 3 decades will pose tremendous challenges to the future of American prosperity. The non-partisan Congressional Budget Office (CBO) projects that real economic growth will steadily decline over the next 30 years, averaging just 2.2 percent over the next decade and falling to an average pace of 1.6 and 1.5 percent, respectively, in the 2 subsequent decades (CBO, 2021). This frail pace of growth is projected to be accompanied by a decline in labor force participation within the next 3 decades to an average rate of just 60.1 percent—the lowest since 1969 and far below the 2000 peak of 67.3 percent (CBO, 2021). Meanwhile, the size of the federal government’s debt relative to the size of the economy is projected to explode, doubling over the next 30 years and reaching 200 percent of total economic output by 2051. For perspective, current federal debt—inclusive of the extensive pandemic relief over the past year—as a share of Gross Domestic Product (GDP) is similar to World War II levels. However, whereas federal debt as a share of GDP fell swiftly following World War II, the CBO projects the debt share to skyrocket over the next 3 decades to the point where the cost of servicing the debt alone will triple to representing over a quarter of all federal spending by 2051 (CBO, 2021). Absent a dramatic course correction, these trends threaten to create headwinds for blue-collar wages, middle class incomes, broad-based employment opportunities, business dynamism, and macroeconomic stability.
The pandemic interrupted the longest period of economic expansion on record and came on the heels of 3 years of unprecedented economic gains, most especially for America’s communities forgotten by the policies of previous administrations (CEA, 2021). In 2020, before the pandemic and amidst the strong economic gains of the 2017-19 period, two-thirds of Americans were satisfied with the state of the economy and nearly three-quarters expected to be better off financially in the following year (Brenan 2021, Reinhart 2020). While the pandemic was the worst negative shock to the U.S. economy since the Great Depression, interrupting these historic economic gains and high level of American optimism, the response of the federal government through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and related packages, Operation Warp Speed (OWS), and executive action helped build a bridge to the other side of the pandemic’s destruction while enabling a robust and historic recovery (CEA, 2021).
As the country continues on the path to full recovery put in motion by this suite of policies implemented in 2020, the views of Americans about different economic systems shed light on the promise of pro-growth policies that garner public support. As of 2019, 57 percent of Americans maintained a negative view of socialism while 87 percent had a positive view of the free enterprise system (Jones & Saad, 2019). The same survey found that small businesses—a key focus of the CARES Act through the Paycheck Protection Program (PPP)—had a 97 percent favorability rating and entrepreneurs had a 90 percent favorability rating. Even more recently, a 2021 survey found that 64 percent of U.S. voters were opposed to tax increases, with only 22 percent supporting an increase in taxes (Rasmussen, 2021). Policies that reduce the burden of taxation on the middle class and small businesses, remove burdensome regulations so that entrepreneurs are free to innovate and create, and focus on boosting the wages and well-being of American workers and American families first, will not only improve the U.S. economic outlook, but are proven to be widely supported by the American people (CEA, 2020a; Rasmussen, 2021; Jones & Saad, 2019). Furthermore, their record of implementation over the course of the prior administration proves their efficacy and capacity (CEA, 2020a).
W H Y A F P I I S E S S E N T I A L
Division remains on how best to define, achieve, and further American prosperity for our Nation’s citizens. While some view American prosperity as the product of government grand design bestowed upon the people within our borders and beyond, others hold a different vision, one grounded in the evidence of the past and in the founding principles of the Nation. This vision holds that American prosperity is earned by the individual through their own inherent skill, creativity, and determination—and that government serves to secure the right of the individual to pursue this prosperity, defending Americans from corrosive forces— including concentrated corporate power, corrupt special interests and foreign governments, as well as self-serving politicians and bureaucrats —that seek to limit competition in order to