The Greatness of Growth and the American Dream

“Growth is good.”¹ So says George Mason University economist Tyler Cowen. In fact, he believes that the pursuit of sustainable economic growth should be one of the “two and only two ‘stubborn attachments’ in our social philosophy” (the other being human rights).² Another economist, Eli Dourado—in an essay devoted to “the unsurpassed beauty of economic growth”—writes that “growth isn’t just ethical. It’s sublime.”³ Meanwhile, the International Monetary Fund reminds us that “economic growth is the single most important factor influencing poverty.”⁴ (Emphasis in original.)

Growth improves economic mobility and opportunities for those who need them the most. But perhaps the most sublime aspect of growth is the way it helps us build stronger commitments to our liberal order against our worse instincts.

We have known about the greatness of growth since economic historians and economists began studying its dramatic acceleration in the 19th century. Economic historian Deirdre Nansen McCloskey calls this explosion in growth and widespread wealth the Great Enrichment. The period, she says, saw real income per capita rise by a factor of 30 and up to 100 in the developed world starting around 1800.⁵ This period is also characterized by an expansion in freedom and opportunity.

Exactly what sparked this expansion is still debated. In a seminal paper, Douglass North and Barry Weingast argue that the constitutional constraints imposed in late 17th-century England on arbitrary royal power laid the foundation for credible commitments that transformed the institutional landscape into one that nurtured economic progress by safeguarding property rights and enforcing contracts.⁶ Others have argued that, while institutional changes are important, they are an incomplete explanation.⁷

McCloskey is among the scholars who believe that the role of institutions has been overstated. She points out that many of the institutional changes highlighted by North and Weingast occurred long before the 1800s. She argues that what sparked the engine of modern economic development was a seismic cultural shift in the ideas, values, and rhetoric related to progress, innovation, and entrepreneurship.⁸ Liberalism also plays a role in this story. McCloskey writes,

Letting people have a go to implement such ideas for commercially tested betterment is the crux. It comes, in turn, from liberalism, Adam Smith’s “obvious and simple system of natural liberty,” “the liberal plan of [social] equality, [economic] liberty, and [legal] justice.” Liberalism permitted, encouraged, and honored an ideology of “innovism.”⁹

That is a term she prefers to “capitalism.”

Unfortunately, the slower growth of the past few decades has resulted in another culture shift, this time away from being pro-progress, pro-capitalism, and pro-liberalism. Instead, the turn is toward thinking that fears innovation and change and even believes we should sacrifice economic growth to pursue needs that are allegedly more pressing. “Degrowthers” on the left and “common-good capitalists” on the right have soured on economic growth, and so has much of our culture.

Not only should we not accept stagnation, but we should proclaim the greatness of economic growth. Making it easier to build, innovate, realize gains through trade, and enter the country are just some means of encouraging faster economic growth in America—growth for the benefit of us all.

The Greatness of Growth

Almost every social, economic, and political initiative is driven, to a significant extent, by economic growth, well captured today by rising per capita gross domestic product. Economic growth used to have an all-encompassing, bipartisan appeal—and for good reason. Economic growth is the cornerstone of viable economic policy. Its importance is fundamental to alleviating poverty, increasing employment, reducing government budget deficits, and raising living standards. While growth alone doesn’t always accomplish all these aims, we must recognize that in the absence of growth, achieving key policy goals and improving living standards are far more challenging.

Small differences in growth rates have monumental impacts over time on the incomes of average people. The average American is more than four times better-off than was his or her counterpart in 1950. Measured in 2024 dollars, real GDP per person rose from $20,330 in 1950 to over $86,118 in 2024, a rate of just under 2 percent per year.¹⁰ If the US economy had grown at an annual rate of 3.5 percent after 1950, real GDP per capita in 2024 would have been $259,249.

The impact of growth, or lack thereof, is seen across countries. Recently, Harvard economist Jason Furman reminded us that a small difference in economic growth can make a mighty difference in the lives of people. He writes, “Sometimes I feel like focusing on policies that only affect growth rates by a few tenths of a percentage point feels small. But then I remind myself that the difference between the United States and Argentina over the last 120 years was 0.5 percentage point.”¹¹ His chart, modified for clarity in Figure 1, shows the radical divergence in GDP between Argentina and the United States that has resulted from the small 0.5 percent growth rate difference over a long period of time.¹²

Faster economic growth is also the best way to lift people out of poverty.¹³ As Harvard University’s Dani Rodrik rightly summarizes, “Historically nothing has worked better than economic growth in enabling societies to improve the life chances of their members, including those at the very bottom.”¹⁴ More recently, David Dollar and coauthors updated earlier work, reaffirming that economic growth remained the most important driver of poverty reduction and income growth for the poorest 40 percent of the population.¹⁵

Do these findings hold in the United States? A widely cited study by Harvard economist Raj Chetty and his coauthors, called “The Fading American Dream: Trends in Absolute Income Mobility Since 1940,” rang the alarm. The United States has faced, the authors say, a substantial decline in absolute mobility (the likelihood that children will earn more than their parents did at the same age) since the 1940s. The economists find that growing income inequality mostly caused the drop.¹⁶ They also argue that this decline would be better addressed by government redistribution that reduces inequality than by economic growth. Chetty described the conclusion of the study this way: “If we want to revive the American Dream of increasing living standards across generations, then we’ll need policies that foster more broadly shared growth.”¹⁷

In a series of papers assessing these claims, Scott Winship—a coeditor of this handbook—lays out why he disagrees with them. First, while Winship finds that intergenerational mobility has indeed declined, he also finds that its reduction is smaller than Chetty and his team have measured. This decline is also mitigated by how much richer Americans are now than 75 years ago.¹⁸ Second, “using an approach” that he says “avoided a questionable assumption embedded in the Chetty et al. strategy,” Winship finds that the main culprit behind declining mobility is slower economic growth rather than rising income inequality. Winship writes, “At the very least, that indicates that it is entirely unclear that rising inequality has been more important than slower growth in reducing absolute mobility. But the more appropriate conclusion seems to be that the Chetty paper’s conclusion is wrong.”¹⁹ In other words, economic growth does remain the most effective means to lift people out of poverty and promote upward absolute mobility.

Figure 1. GDP Per Capita, Argentina vs. the United States, 1900–2022

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Source: Adapted from Jason Furman (@jasonfurman), “Sometimes I feel like focusing on policies that only affect growth rates by a few tenths of a percentage point feels small,” X, April 17, 2024, 9:45 a.m., https://x.com/jasonfurman/status/1780592423288098927. Data are from Jutta Bolt and Jan Luiten van Zanden, “Maddison Style Estimates of the Evolution of the World Economy: A New 2023 Update,” Journal of Economic Surveys 39, no. 2 (2024): 631–71, https://onlinelibrary.wiley.com/doi/full/10.1111/joes.12618.

Improved standards of living, mobility, and opportunity are important benefits from modern economic growth, but they aren’t the only ones. They may not even be the most important ones. In Enlightenment Now, Steven Pinker writes, “Wealth provides not just the obvious things that money can buy, such as nutrition, health, education and safety, but also, over the long term, spiritual goods such as peace, freedom, human rights, happiness, environmental protection, and other transcendent values.”²⁰ Indeed, the ultimate reason to make economic growth a priority is moral. In his 2005 book, The Moral Consequences of Economic Growth, Harvard professor Benjamin Friedman shows that with economic growth, a country has a greater shot at tolerance, peace, democracy, and the embrace of liberal values.²¹ Several other researchers also have made that case.²²

In contrast, as growth slows, we lose ground on democracy, liberty, and political stability even if the absolute level of material prosperity remains high.²³ As Pinker writes, “If economies stop growing, things could get ugly.”²⁴ Slower growth, or stagnation, even for a still-rich society, creates beggar-thy-neighbor mindsets that risk our liberal values and all the noneconomic good things we like. In fact, slower growth over the past 20 years, or what economist John Cochrane calls “the quietly insidious economic cancer of our era,” is likely an important factor in the current rise of illiberalism on both the right and the left in the United States and around the world.²⁵

Growth: The Easiest Way to Reduce Debt

The United States faces a daunting long-term fiscal challenge, driven by rising entitlement costs and structural deficits. The public debt-to-GDP ratio is already around 100 percent and is projected to reach an alarming 156 percent over the next 30 years under current policies. Thus our nation is on an unsustainable fiscal trajectory that threatens future economic prosperity and burdens future generations with excessive debt-service costs.²⁶

While reforms meant to control unsustainable spending growth, especially in major entitlement programs, would be the most direct path to reining in deficits, belt-tightening measures are remarkably unpopular. With an aging population and strong public support for programs such as Social Security and Medicare, elected officials face intense pressure to avoid reductions that could be portrayed as undermining critical safety nets.

Under these circumstances, we should be all the more interested in the impact a sustained increase in economic growth could have on our debt-to-GDP ratio over the long run.

The most recent Congressional Budget Office (CBO) long-term budget outlook projections (which do not include the impact of the One Big Beautiful Bill Act of 2025) indicate that, holding everything else constant, a change in the real annual growth rate from its projected 1.6 percent 30-year average to 3 percent would lower the debt-to-GDP ratio to 104 percent by 2055 (from 156 percent in the baseline). A 4 percent growth rate would lower the ratio to 78 percent.²⁷ (See Figure 2.)

History has demonstrated how economic growth helped during previous eras of elevated debt levels. The most striking example is America’s economic boom after World War II, from 1947 to 1969. Coupled with spending restraint, the growth led to primary surpluses for about two decades and slashed the debt-to-GDP ratio from a peak of 106 percent in 1946 to just 28 percent by 1969.²⁸ Similarly, the fiscal discipline and pro-growth policies underpinning the economic expansion from 1993 to 2001 helped reduce the debt ratio from 48 percent of GDP to 31.5 percent.²⁹

Clearly, even if the most optimistic growth projections came true, they alone would not completely eliminate the nation’s long-term fiscal imbalances.³⁰ Adjustments designed to control structural deficits are ultimately required if we’re to restore fiscal sustainability. In fact, the main driver behind the dramatic reduction in the debt-to-GDP ratio following World War II was two decades of primary surpluses starting in the 1950s.³¹ But stronger growth represents the most politically feasible and economically powerful lever to immediately start bending the debt curve back toward safer territory.

Technological Innovation and Growth

“Productivity isn’t everything, but in the long run it is almost everything,” explained the Nobel laureate economist Paul Krugman.³² Indeed, in the long run, two things matter for GDP: the size of a country’s labor force and the productivity of that workforce.

Worker productivity is determined by the inputs used to produce goods and services. Economists call these inputs “factors of production.” These factors consist of human capital, physical capital (such as machines), and technological knowledge. With the invention and use of steam-engine technology in the 19th century and controlled and transmitted electricity around the turn of the 20th century, the productivity of manufacturing workers increased dramatically. Steam engines reduced transportation time and costs, and the electrification of technology meant workers could operate machines that could process goods at much faster paces.

One study published by the Federal Reserve Bank of San Francisco estimates that “electricity raised the [annual] growth rate of labor productivity by an average of 0.54 percentage points over the period 1899–1929.”³³ To this day, the importance of technological innovation remains an essential factor in boosting productivity growth and, in turn, economic growth.³⁴ During the Obama administration, the Department of Commerce produced a white paper reporting that “technological innovation is linked to three-quarters of the Nation’s post-WWII growth rate.” Furthermore, 75 percent of the differences in output per worker across countries can be explained by variation in innovation-driven productivity.³⁵

Figure 2. Public Debt Held by the Public as a Percentage of GDP, Baseline vs. Higher Real GDP Growth, 2025–55

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Source: Congressional Budget Office, The Long-Term Budget Outlook: 2025 to 2055, March 27, 2025, https://www.cbo.gov/publication/61187; and Congressional Budget Office, Key Budget and Economic Data, Long-Term Budget Projections, March 2025, table 1, https://www.cbo.gov/data/budget-economic-data#1.

The American economy is growing faster than its peer economies, and Americans are richer than their counterparts in other rich countries because productivity is higher. From 1990 to 2022, labor productivity in the United States increased by 67 percent, versus 55 percent in Europe and 51 percent in Japan.³⁶ But the reality that certain countries have more, and better, factors of production is based on one simple fact: Incentives matter. A large body of literature has shown that strong institutions, including secure property rights, create incentives for investment and innovation, ultimately improving the productivity of labor and capital.³⁷

The Challenges for Growth

In recent years, economic growth has slowed considerably. In fact, growth has been markedly weaker than it was even during many previous low-growth periods, such as 1974 through 1981, the era of stagflation, known better for its inflation and slow growth than its prosperity. Initially, recent slow growth was attributed to the 2008 financial crisis and its aftermath. But even after that recession ended and financial conditions returned to normal, growth remained below average during the period of economic expansion preceding the COVID-19 pandemic. These lower growth rates have been blamed on the slowdown in growth of productivity and, in particular, of total factor productivity (TFP). (TFP is a measure of how efficiently an economy is using its inputs to produce output. It captures the effects of factors not directly related to the quantity of labor and capital.)³⁸

Figure 3. Total Factor Productivity in the United States, 1947–2025

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Source: Adapted and updated from Eli Dourado, “Notes on Technology in the 2020s,” Eli Dourado, December 31, 2020, https://www.elidourado.com/p/notes-on-technology-2020s. This uses data from San Francisco Federal Reserve Bank, “Utilization-Adjusted Total Factor Productivity,” https://www.frbsf.org/economic-research/indicators-data/total-factor-productivity-tfp/. Note: TFP series were computed using utilization-adjusted quarterly changes. Productivity is measured at the first quarter of each year. The black and red lines show linear trends over 1947–72 and 2005–25, respectively.

As Eli Dourado noted in 2020, “Mean utilization-adjusted TFP growth from 1947 through 1972 was 2.1 percent. Since 2005, it has been 0.17 percent.”³⁹ (The TFP measure has a limitation: It doesn’t account for how intensively inputs are being used. Utilization-adjusted TFP attempts to correct for this limitation by accounting for variation in how intensively firms use their inputs.)

Figure 3 illustrates Dourado’s argument. The black and red lines show linear trends over the 1947 to 1972 period (black) and 2005 to 2025 period (red). The differences illustrate the dramatic change in the growth of utilization-adjusted TFP between the two periods.

The relatively sluggish economy of recent years has had some economists wondering if we have fully extracted the productive power of the previous technological advances. Blogger economist Noah Smith, for instance, noted,

In the 2010s, we largely decided that we were in the middle of a technological stagnation. Tyler Cowen’s The Great Stagnation came out in 2011, Robert Gordon’s The Rise and Fall of American Growth came out in 2016. Peter Thiel declared that “we wanted flying cars, instead we got 140 characters.” David Graeber agreed. Paul Krugman lamented the lack of new kitchen appliances.⁴⁰

Meanwhile, in The Economist, we read that “Robert Gordon of Northwestern University has echoed this sentiment, speculating that humanity might never again invent something so transformative as the flush toilet.”⁴¹

Many theories attempt to explain why productivity growth and economic growth in general have slowed down. Some observers have asked if we have become too complacent. Others wonder if disincentives to work built into our welfare programs have caused what Edward Glaeser calls “the 40-year secular rise in the number and share of jobless adults.”⁴² Still others have blamed chronic demand shortfalls,⁴³ or they ask if ideas are simply getting harder to find.⁴⁴

We may not understand exactly why productivity growth has slowed for the past few decades, but the problem is not a lack of ideas. People have plenty of ideas about new technologies, such as vaccines for all sorts of diseases, perhaps including cancer, thanks to the application of generative artificial intelligence to drug discovery.⁴⁵ Adam Thierer of the R Street Institute writes, “AI and [machine learning–]enabled technologies are poised to help reduce [cancer’s] staggering death toll.”⁴⁶ We have all the ideas we need to create energy superabundance, including but not limited to the deployment of nuclear power. We know what it would take to improve farming and increase housing abundance.⁴⁷ We also envision ending electrical interference by building a telescope on the far side of the moon.⁴⁸ We have all the knowledge needed to make supersonic aircraft as common as regular airplanes.⁴⁹ We also have ideas about how to allow more people to bring their talents to the United States to help build these innovations.⁵⁰

Each of these ideas would increase our productivity and growth, especially if several were deployed together. Getting 3 or 4 percent sustained real growth would be hard but not impossible. We could get that kind of growth with widespread adoption of productivity-enhancing technology, alongside more immigration and pro-building deregulation. Unfortunately, we have made policy choices that get in the way of many of these new ideas. The choices we have made also mean we don’t fly from Paris to New York in four hours or build bridges in five years anymore.⁵¹ These choices may be influenced by a skeptical attitude toward progress that has produced an economy in which supply is constrained by a proliferation of veto points, distortive taxes and regulations, and more.

The inaction intrinsic in the “vetocracy” (a term coined by American political scientist Francis Fukuyama)—further armed with a precautionary principle mindset that demands that every technology and innovation be proved risk-free before it is deployed—could do its worst damage if applied to AI.⁵² AI is a general-purpose technology, much like electricity, that has the potential to boost total factor productivity and labor productivity across many industries.⁵³

As the new Abundance Institute nicely sums up,

Fear is costing us our future. While technology holds the power to transform our economy and lives, we often throttle technological breakthroughs before they can fulfill their life-changing potential. Fueled by a mix of cultural anxieties and policy challenges, this fear-based approach risks denying humans an abundant future.⁵⁴

A Path to Strengthening Economic Growth

“A supply-limited economy requires supply-oriented policy, not stimulus, to grow,” diagnoses Cochrane.⁵⁵ Yet many on the right and the left disagree and believe that more government and an American industrial policy are what our economy needs.

To that effect, the Biden administration deployed what can be described as a green energy industrial policy. It included mandates, protective tariffs, and what could amount to $1.8 trillion in subsidies and tax credits over 10 years.⁵⁶ This policy was the latest installment in an effort that started decades ago with solar and wind loan-guarantee programs, subsidies for green infrastructure, and tax credits for electric vehicles.⁵⁷

We are also in the middle of an industrial policy directed at boosting US semiconductor construction. This bipartisan effort includes $52 billion in tax subsidies to the semiconductor industry as part of the CHIPS and Science Act and the implicit designation of Intel as America’s national champion. This effort at semiconductor industrial policy is reminiscent of the one deployed in the 1980s and 1990s, only bigger.⁵⁸ Meanwhile, the vision of “national conservatives” (or natcons) for industrial policy is one that would deploy heavy protective tariffs, tax credits, and more subsidies. It aims to restore manufacturing to something close to its perceived 1950s grandeur in which more people are put back to work and America’s crumbling social fabric is mended.⁵⁹ Natcons argue that the Biden administration got industrial policy wrong and that they must, can, and will do better.⁶⁰

That is doubtful. Industrial policy has a long history of failure and waste, as documented by various scholars.⁶¹ This reality is inescapable largely because industrial policy consists of politicians picking winners (manufacturing, green energy, or Intel) and losers. That’s something even the best government is bad at doing.⁶² Thankfully, there are plenty of supply-oriented policies legislators could pursue. Reforming the regulatory regime, including for immigration, and the tax code, as well as making trade freer, would go a long way toward liberating the supply side of the economy and boosting growth, helping lift all boats, and reversing the declining mobility that ails our increasingly illiberal nation.

Deregulate

The United States suffers from excessive regulatory accumulation. Nearly all studies conducted in recent years on the effects of regulation on economic growth have found that regulation has adverse effects on economic activity, with the effect on TFP particularly significant. For instance, a 2016 Mercatus Center study found that the impact of regulatory accumulation on the US economy’s long-run growth has been sizable. It reduced the annual growth rate of GDP by 0.8 percent during 1977–2012.⁶³ This amounts to tens of thousands of dollars of lost GDP per capita.⁶⁴

A few papers have also shown how more regulation led to more concentration, less competitive industries, and therefore less innovation and growth.⁶⁵ A recent paper by Shikhar Singla documents how regulation-driven increases in concentration after the late 1990s in the United States are associated with greater difficulty of entry, lower productivity, and lower investment.⁶⁶

Reducing regulatory accumulation should be a priority to those who want to help a particular industry. Take manufacturing. The Biden administration believed the sector to be so important that it threw billions of dollars in subsidies and tax credits at manufacturing. Similarly, President Trump and the natcons argue that the lack of tariffs before this year hurt American manufacturing. The reality is that if the sector needs help, it’s with the many layers of rules weighing it down. In a recent article, trade economist Dan Ikenson tried to put a number on the burden the industry faces:

For manufacturing firms, the cost of federal regulations was roughly $350 billion, or 13.5% of the sector’s GDP—a burden that is 26% greater than the inflation-adjusted cost of regulatory compliance 10 years ago. Regulations cost the average US manufacturing firm over $29,000 per employee, which is more than double the economy-wide average. That cost increases to a staggering $50,100 for manufacturers with fewer than 50 employees, meaning the burden on smaller firms (today’s challengers; tomorrow’s champions) stifles entry, innovation, competition, dynamism, and the productivity it would spur.⁶⁷

It is remarkable that the manufacturing industry is doing so well considering that it faces so many environmental, labor, financial, and health regulations. Trimming outdated and overbearing rules, rather than imposing tariffs and dishing out subsidies, would go a long way toward enticing companies to produce more and even to produce more in the United States, if that’s what they would prefer.

However, more destructive than regulatory accumulation is the targeted regulatory regime that affects some industries and the various regulatory manias known as “NIMBYism” (the mindset of “not in my backyard”), punishment by permitting, and environmental “safetyism,” among others. These regulatory derangements act as a deadweight dragging down the engines of entrepreneurship, innovation, and economic progress. The tangle of complex rules and permission-slip bureaucracy get in the way of Americans building factories and housing, developing new technologies and drugs, and more.

Economist Bryan Caplan’s latest book, Build, Baby, Build, summarizes the work of economists estimating the significant economic costs imposed by excessive housing regulations and land-use restrictions in the United States.⁶⁸ Ample evidence indicates that zoning has increased housing prices, hence obstructing the flow of labor to those cities where workers would be most productive. Strict zoning raises housing costs in highly productive cities, pricing many workers out.

While an often-cited 2019 paper likely overstated the impact of housing regulation on growth, a 2018 paper by Glaeser and Joseph Gyourko concluded that “a lower bound cost of restrictive residential land use regulation is at least 2 percent of national output.”⁶⁹ Even mundane local land-use and zoning rules, when accumulated across the country, impose staggering economy-wide costs by distorting the location decisions of households and firms. Thus even modest deregulation could have large and positive impacts.

After housing, an energy regulatory reform agenda should be a priority. Unlocking energy abundance is a sure way to fuel massive economic growth, as it is essential to all other forms of production. But doing so requires dismantling existing barriers to innovation, including, but not limited to, removing restrictions that obstruct exploration for more oil and gas, bar nuclear energy production, and raise the costs of developing geothermal, solar, and wind energy sources.⁷⁰ In this case, the first priority would be to remove the “permission tax” that is imposed on every energy infrastructure project. Writing for City Journal, Eric Olson and Lauren Agpoon explain:

Just to complete the required environmental-impact statement under the National Environmental Policy Act (NEPA) takes an average of 4.8 years. For essential electric-transmission projects, the average jumps to 6.5 years. Some projects sit a full decade before final approval, adding needless uncertainty for investors who allocated significant capital to these ventures.⁷¹

Green projects are affected similarly. Data from the Center for Growth and Opportunity show that

solar projects took around 2.2 years [for NEPA approval], while hydroelectric projects had the longest approval time, averaging 5.1 years. The average length of an [environmental impact statement] report was 1,214 pages, with some extending up to 5,794 pages. The researchers note that the average length for nuclear projects might be underestimated, as about 50% of them are still in the NEPA process. . . . On the Atlantic coast, NEPA is being used to slow down and shut down wind farm development. The Cape Cod wind farm was ultimately canceled after 16 years of NEPA setbacks.⁷²

Permitting restrictions for mining, including for rare minerals needed for green energy projects, add to the supply problem. Recognizing the issue, Senators Joe Manchin and John Barasso proposed the Energy Permitting Reform Act of 2024, aimed at removing bottlenecks and permitting barriers that get in the way of clean energy market growth. A few NEPA reform bills were also introduced in the 118th Congress.⁷³ Unfortunately, so far, none have been enacted, even if the issue is still popular. The Problem Solvers Caucus, a centrist, bipartisan group led by Representatives Scott Peters and Gabe Evans, released its own permitting reform framework in September 2025, outlining shared principles to cut red tape, impose firm review deadlines, and strengthen domestic energy and critical mineral supply chains.⁷⁴

Meanwhile, in line with the Trump administration’s broader permitting-reform agenda, the Council on Environmental Quality (CEQ) issued new nonbinding NEPA implementation guidance on September 29, 2025, replacing its February 2025 memorandum.⁷⁵ The updated guidance encourages agencies to streamline reviews, adopt CEQ’s model procedures based largely on the 2020 regulations, and prioritize efficiency, uniformity, and predictability in environmental reviews.

Moreover, all the subsidies directed to making semiconductor chips in the US are likely no match for the permitting tax imposed through the Toxic Substance Control Act review. According to Jordan McGillis,

As of July 2024, 243 new chemicals have been in Toxic Substance Control Act review for a year or longer, the American Chemistry Council reports. The result is that chipmaking businesses have more trouble getting and using the materials they need in the U.S. than they and their competitors do abroad.⁷⁶

And, of course, building chip “fabs” (fabrication plants), the first step to reshoring semiconductors to the United States, requires getting permission from the dreaded NEPA as well as clearing other environmental, health, and safety regulations at the federal, state, and local levels. Like any other project with a long construction time and complex supply chains, building semiconductor plants is extremely vulnerable to permitting-related delays. This explains why US fab construction is among the slowest in the world.⁷⁷

The high cost of permitting isn’t limited to the private sector. Consider the construction of a wall on America’s southern border. Whatever one thinks of that project, it remains the case that to expedite the wall’s construction, the secretary of the US Department of Homeland Security would need to exercise waiver authority under Section 102(c) of the Illegal Immigration Reform and Immigrant Responsibility Act to waive entirely or partially some 20 statutes.⁷⁸

Red tape at all levels of government and for all sectors should be significantly reduced. That includes occupational licensing, scope-of-practice requirements, and other labor-restricting rules. But so, too, should we moderate the mindset of the precautionary principle. An overly risk-averse approval process slows drug development and more adventurous innovations. The same is true of the safety requirements imposed on the development of new technologies. Throughout history, innovation and new technologies have been met with opposition, usually from vested interests.

As expected, the rise of artificial intelligence and robotics has rekindled the debate about the impact of technology on employment⁷⁹ and safety and has met with calls for more federal regulation or even outright bans.⁸⁰ These concerns are misplaced, or at least premature, because we as yet have no evidence of such harms. But we do have evidence that existing regulations slow innovations, limit their adoption, and restrain both productivity and growth. Thierer suggests that permissionless innovation is a much better approach to governing algorithmic systems:

Although some safeguards will be needed to minimize certain AI risks, a more flexible, bottom-up (i.e., less regulated) governance approach can address these concerns without creating overbearing, top-down (i.e., more regulated) mandates, which would hinder algorithmic innovations.⁸¹

Reduce Government Debt

The last time a federal budget surplus was recorded was in 2001. With current levels of entitlement spending and promises of future spending increases, CBO projections convey one simple message: Budget deficits are now the norm, and federal debt levels will continue to mount, even as the interest on that debt eats further into the federal budget. The level of public debt was $28.2 trillion in 2024, about 98 percent of GDP, and this number promises to rise with the passage of the One Big Beautiful Bill Act, which experts estimate could add $6 trillion to the public debt over the next 10 years.⁸² Most of this growth comes from mandatory spending, and two programs alone, Social Security and Medicare, are the drivers of our future debt.⁸³

These realities present serious problems for America’s future economic condition. After years of arguing that we shouldn’t worry about the size of the debt, many scholars on the left have started to call for austerity.⁸⁴ In no small part, this conclusion has to do with interest payments as a share of GDP almost doubling in the past few years, from 1.5 percent of GDP in 2021 to 3.3 percent today.⁸⁵ Interest payments cost more than defense or Medicaid budgets. This increase has opened the eyes of many to the fact that a large and growing debt leaves us more exposed to interest rate hikes.⁸⁶

A larger debt also creates a drag on the economy. The relationship between debt and economic growth has been the subject of extensive research, with many studies suggesting that high levels of debt can slow economic growth. In their seminal paper “Growth in a Time of Debt,” Carmen Reinhart and Kenneth Rogoff analyze data from 44 countries over a period of 200 years. They find that when government debt exceeds 90 percent of GDP, economic growth rates fall by 1 percent or more.⁸⁷

Despite some researchers later identifying methodological issues that could affect the results’ robustness, this study led the way to a flurry of research on the issue.⁸⁸ At the Cato Institute, Jack Salmon recently reviewed 40 studies published since the Great Recession looking at the connection between debt and slower growth. He finds that “a notable pattern emerges from existing research published since the [financial crisis], pointing toward a broadly well-founded conclusion that high levels of public debt have a negative impact on economic growth.”⁸⁹ Since then, another 15 studies have been published that show there is a debt-to-GDP threshold beyond which debt becomes a drag on the economy.⁹⁰ The threshold level is still a source of debate and is highly influenced by some of the factors mentioned in this chapter, such as institutions and the composition of the spending.

Reducing Americans’ debt burden is imperative. In recent years, an academic consensus has emerged that spending-based fiscal adjustments are not only more likely to reduce the debt-to-GDP ratio than tax-based ones but also less likely to trigger a recession.⁹¹ In fact, if accompanied by the right type of policies, spending-based adjustments can be associated with economic growth.⁹²

Reform the Tax Code

Beyond the effects of rapidly increasing debt on slowing growth, abundant evidence exists that high levels of taxation also depress the growth rate. Research from the 1970s, 1980s, and 1990s describes an inverse relationship between marginal tax rates and changes in the pace of economic activity.⁹³ Many economists believe that marginal tax rates on personal income as high as 70 percent in 1980 had a negative effect on the supply of capital and labor. High taxation particularly affected labor-force participation rates and, thus, the supply of productive labor hours.

Since then, several new studies have looked at the relationship between taxes and growth. One of the most influential and widely cited studies on this issue is a 2010 paper by Christina and David Romer. They use a narrative approach to identify tax changes that are not related to economic conditions and find that tax increases have a negative effect on GDP.⁹⁴ Meanwhile, William Gale and Andrew Samwick review the evidence on the effects of income tax changes on economic growth and conclude that tax cuts can have positive effects on growth, but those effects are modest and likely not sufficient to offset the revenue losses.⁹⁵

In his review of the literature examining the impact of taxes on economic growth, the Tax Foundation’s William McBride finds that not all tax increases have the same impact. He notes, “Of those studies that distinguish between types of taxes, corporate income taxes are found to be most harmful, followed by personal income taxes, consumption taxes and property taxes.” He adds, “These results support the Neo-classical view that income and wealth must first be produced and then consumed, meaning that taxes on the factors of production, i.e., capital and labor, are particularly disruptive of wealth creation.”⁹⁶ This finding is consistent with other work on the relationship between corporate taxes and economic growth that focuses on the role of innovation. According to this research, corporate taxes can hinder innovation and productivity growth, which has important implications for long-term economic performance.⁹⁷

When considering tax reform after the enactment of the One Big Beautiful Bill Act, policymakers should build on the elements that move the US tax code toward neutrality and simplicity and remove those that don’t. By expanding targeted deductions for tips and overtime, raising the state and local tax deduction cap, and layering new carve-outs and credits for select industries and income groups, the law replaced some broad-based reforms with politically favored exceptions, picking winners and losers instead of applying one set of rules to all forms of income and investment. On the other hand, the legislation’s extension of full expensing for most business investments was a long-overdue step toward treating capital costs properly, especially for manufacturing and other capital-intensive industries that had previously faced depreciation schedules longer than the actual life of their assets.⁹⁸

Because corporate taxes remain among the most distortive levies, legislators should also avoid raising the corporate rate and, ideally, continue to reduce it over time. The same principle applies to capital gains taxation, which still represents a double tax on corporate income. Even after the One Big Beautiful Bill Act, the combined federal rate on long-term capital gains, including the 3.8 percent net-investment income tax, remains 23.8 percent, well above the Organisation for Economic Co-operation and Development average of roughly 19 percent. According to the Tax Foundation, this top rate is higher than those among the nation’s competitors: “On average, in the OECD, long-term capital gains from the sale of shares are taxed at a top rate of 19.1 percent, and dividends are taxed at a top rate of 24.4 percent.”⁹⁹ Lower, simpler rates on capital income would do far more to strengthen US manufacturing and investment than the maze of targeted tax credits that both parties continue to favor.

These are only a few proposals. How to reform the tax code to unleash labor, capital, investment, and innovation abundance is one of those areas in which we do not lack ideas.¹⁰⁰ However, future tax cuts should be offset with the elimination of unnecessary deductions, credits, and loopholes and with cuts in spending in order not to add to the debt.

Liberalize Trade

Recent years have seen a reinvigoration of the protectionist mindset on both the political left and right. This is unfortunate given that greater openness to trade boosts productivity, investment, and ultimately economic growth rates. Protectionist policies, in contrast, dampen economic growth and, thus, diminish improvements in living standards.

The most prominent study expressing doubts about the positive impact of trade liberalization on growth is the 2000 paper by Francisco Rodríguez and Dani Rodrik.¹⁰¹ It provides a review of the leading empirical cross-country studies from the 1990s looking at the link between trade openness and economic growth across countries. Rodríguez and Rodrik conclude that much of the evidence that shows a link between trade openness and growth was flawed, owing to issues such as poor measures of trade openness, problems separating trade policies from other sources of growth, and an inability to make robust conclusions about causation. While the authors do not completely dismiss the possibility that trade openness can benefit growth, they caution against overstatement, arguing that the existing cross-country evidence is not definitive.

Almost 25 years later, economist Douglas Irwin offered his own review:

I examine three strands of recent work on this issue: cross-country regressions focusing on within-country growth, synthetic control methods on specific reform episodes, and empirical country studies looking at the channels through which lower trade barriers may increase productivity. A consistent finding is that trade reforms have had a positive impact on economic growth, on average, although the effect is heterogeneous across countries. Overall, these research findings should temper some of the previous agnosticism about the empirical link between trade reform and economic performance.¹⁰²

What about the claim that increasing trade, especially with China, depressed domestic employment in some manufacturing sectors? That’s one of the findings of the famous “China shock” paper by David Autor, David Dorn, and Gordon Hanson, followed by subsequent research with others on the issue.¹⁰³ A review of this literature by the Joint Economic Committee finds that “the conclusion that increasing trade explains depressed domestic employment is at minimum overstated and possibly misleading.”¹⁰⁴ The authors write,

For instance, economist Jonathan Rothwell examines the same Autor–Dorn–Hanson data but accounts for differing macroeconomic trends throughout time and by location. Rothwell shows, after making these adjustments, that the original effects on employment, labor force participation, and wage growth are not significant. In her PhD research, economist Ildikó Magyari shows that firms exposed to Chinese imports reduced some parts of their U.S. business footprint but, contrary to the conventional wisdom, expanded in other areas. Firms exposed to trade with China actually created more net American manufacturing and nonmanufacturing jobs than non-exposed firms during the time studied.

The often striking results that show job losses due to trade in particular sectors or for particular types of workers focus exclusively on losses due to trade without broadening the analysis to account for the winners of increased trade.¹⁰⁵

More recent research has found that job losses from Chinese import competition were offset by employment growth in both manufacturing and services. The offset often took place in the same manufacturing firms that experienced the job losses.¹⁰⁶

The case for reducing trade barriers in the United States goes beyond the promotion of economic growth because trade liberalization can lead to increased competition, lower prices for consumers, and expanded market access for US businesses.¹⁰⁷ One obvious reform to trade policy that would promote growth would be the elimination of all tariffs enacted by the Trump and Biden administrations. During his first term in office, President Trump implemented tariffs, many of which the Biden administration kept, such as the Section 232 tariffs on steel and aluminum and the Section 301 tariffs on Chinese imports; the Biden team also layered on new and higher Section 301 rates in 2024 and extended certain Section 201 measures. In 2025, Trump went much further, imposing sweeping tariffs and expanding Section 232 duties (including a universal baseline tariff, higher country-specific rates, and product-specific hikes such as autos at 25 percent and steel and aluminum at up to 50 percent).

According to Erica York at the Tax Foundation, the new package lifts the weighted-average applied tariff to 18.2 percent (with an effective rate of 13.1 percent, the highest since 1941), amounts to an average tax increase of roughly $1,200 per household in 2025 (about $1,600 in 2026), and would reduce long-run US GDP by 0.6 percent before retaliation—making it the largest tax increase since 1993, at 0.54 percent of GDP. The Supreme Court will soon decide whether the president indeed has the power to impose some of these tariffs.¹⁰⁸

Half of imported goods are raw materials or intermediate goods used as inputs by domestic producers.¹⁰⁹ Unfortunately, many of these inputs are slapped with tariffs. For instance, most goods used for construction—lumber, nails, pipes, sinks, and more—face protectionist measures.¹¹⁰ Removing these tariffs and other protective measures will lower costs for US businesses, making them more competitive in both domestic and international markets. American consumers, of course, will also gain. Removing quotas and import license requirements could increase the availability of goods and services, leading to lower prices and greater consumer choice. Also, since a large share of trade happens between related firms¹¹¹ and the largest exporting firms are also the largest importing firms,¹¹² removing trade barriers will tend to help exports.

Another piece of low-hanging fruit, in theory, would be for the United States to negotiate a free trade agreement with its fellow NATO members. As of now, the United States has free trade agreements with 20 countries, but of those, only Canada is a NATO member.¹¹³ Not only would lowering domestic subsidies, particularly to exporters, discourage foreign governments from retaliating with their own subsidies or tariffs, but also, reducing subsidies would more directly improve resource allocation by subjecting production and investment decisions to the discipline of market competition.¹¹⁴

Liberalize Immigration

A repeated claim from those who would like to see more US tariffs is that 19th-century America saw rapid growth at a time when the country heavily protected its domestic industries. Numerous scholars, including Irwin and Phil Magness, have debunked the claim that tariffs supported growth.¹¹⁵ What is less often remarked on is the positive effect that immigration had on economic growth during that century. In fact, the unrestricted and large immigration of the time made the United States anything but a protectionist country.¹¹⁶

The importance of immigration to US economic growth continues to this day. For instance, in the 19th century, high levels of low-skilled immigration promoted much technological improvement around tooling, machinery, and assembly, which helped fuel economic growth.¹¹⁷ Similarly, in modern times, a 2017 report by the National Academies of Sciences, Engineering, and Medicine on the economic and fiscal effects of immigration found that “immigration has an overall positive impact on long-run economic growth in the U.S.”¹¹⁸ According to the Council on Foreign Relations, “Immigrants—almost 48 million of whom now live in the United States among an overall population of roughly 335 million people—generated some $1.6 trillion in economic activity in 2022, the most recent year for which such data is available.”¹¹⁹

The way it works is simple. More immigrants mean more workers who help produce more goods and services. But that is not all. The vastly higher US productivity means that immigrants coming to the United States are more productive there than they were in their country of origin, even when doing the same jobs.¹²⁰ Put another way, when immigrants come to the United States, the national GDP is boosted by more than the GDP decline in the countries the immigrants come from.¹²¹

In addition, immigrants don’t just produce—they also buy things. They rent apartments, buy groceries, get haircuts, and purchase cars. This activity creates demand that helps other businesses grow. While higher demand may put upward pressure on some prices, higher labor supply and production will counteract that effect.

Immigrants also boost growth in other ways. They start businesses at higher rates than do native-born Americans. These new businesses in turn hire Americans.¹²² In fact, many of America’s most valuable companies—including Google, Nvidia, SpaceX, and Yahoo—were founded or cofounded by immigrants. Immigrants played a founding role in slightly more than half of America’s billion-dollar startups.¹²³

Also, immigrants file patents that drive innovation at relatively high rates.¹²⁴ They raise the supply of labor in fields like artificial intelligence and quantum computing. A significant portion of America’s Nobel Prize winners, 40 percent from 2000 to 2023, have been immigrants, particularly in physics, chemistry, and medicine.¹²⁵ And as William Kerr noted in 2019, “About 57 percent of migrating inventors have come to the United States,” which has been a tremendous gift to the nation.¹²⁶ When multinationals can’t hire workers with an H-1B (a high-skilled guest worker permit), they will invest in the employment of their foreign affiliates.¹²⁷ In other words, if we don’t take this talent, competing firms in Canada, the United Kingdom, and elsewhere will—meaning the next breakthrough technology could be developed in Toronto or London instead of Silicon Valley or Austin. Some argue that this issue is even a national security imperative.¹²⁸

The bipartisan desire for a manufacturing and housing-construction boom will require more labor and more experts. More immigration can supply these skills to increase Americans’ output of everything from semiconductors to houses, elder care, and medicine. David Bier explains that “immigrants complement Americans. They don’t replace them. This is one reason why U.S. worker employment has almost always moved in the same direction as immigrant employment.”¹²⁹

Studies looking at the H-1B lottery system find that restricting the number of permits doesn’t increase native-born employment,¹³⁰ and firms that hire more H-1B workers also hire more highly skilled natives.¹³¹ There is also evidence that hiring more immigrant STEM workers increases wages for well-educated natives.¹³² A review of the literature finds that the number of papers showing the complementarity of H-1B workers to natives outweighs by far the number of papers that show a substitution effect.¹³³

This complementarity also exists for low-skilled immigrants, who often take manual-intensive jobs (such as in agriculture, construction, and cleaning). The immigrants allow native-born Americans, even those less educated, to shift into higher-paying, higher-skilled jobs at which they have a comparative advantage.

Looking at immigration data between 2000 and 2022, economists Alessandro Caiumi and Giovanni Peri find a great deal of complementarity between immigrants and native workers, as well as immigrants’ positive impact on wages for less educated natives and on natives’ employment.¹³⁴ In fact, this complementarity is what explains the recent finding that new low-skilled immigrants to the United States provide an indirect fiscal benefit of roughly $750 per immigrant annually by allowing natives to move into higher-paying jobs and sometimes to work more hours.¹³⁵

In reverse, a reduction in immigration might not increase natives’ employment. Research looking at the elimination of the Bracero Program, a federal policy that increased Mexican immigration between 1942 and 1964 to deal with farm labor shortages, showed that its cessation didn’t raise farm wages for natives as the Johnson administration had hoped.¹³⁶ Instead, it led to more mechanization. This research again suggests complementarity rather than pure substitution between immigrants and native-born workers.

Many issues are worth debating when it comes to immigration—for instance, its impact on culture and rates of integration or the need to reform H-1B visas. We could also debate the proper filters to apply to select immigrants. However, evidence suggests that liberalizing immigration to allow more people into the country to work would benefit economic growth. A nation has both the right and the duty to enforce its laws, including deciding who may enter and under what conditions. Unfortunately, the way President Trump has executed immigration policy undermines due process, predictability, and the broader national interest.

Conclusion

We take for granted the material abundance that affords us the luxury of complaining about that abundance and the pluralistic values associated with it. While the United States remains a very rich country, we should not become complacent about the state of the economy. Diminished growth and productivity rates over the past few decades have awakened the populists on the right and the left. A decline of intergenerational mobility has renewed calls for more government intervention in the economy in the form of industrial policy and protectionism. Discontent about the state of manufacturing is fueling demands that growth should take a back seat to other priorities such as vague “common good” objectives.

Heeding these calls and demands would be a mistake. In The Moral Consequences of Economic Growth, Benjamin Friedman writes, “How the citizens of any country think about economic growth, and what actions they take in consequence, are therefore a matter of far broader importance than we conventionally assume.”¹³⁷ If we want to continue to have rising standards of living, more upward mobility, plenty of opportunities, and a virtuous society, we must make higher and sustained economic growth a priority.

Legislators can play a role by removing the barriers that now obstruct the building of infrastructure and housing, the further development of AI, and the production of new drugs and foods. Government must allow existing energy sources to be tapped and new ones to be discovered so that the price of energy will be such an afterthought that it will never get in the way of the most ambitious innovations. We must also fix our immigration system so that we can unleash the world’s enormous human potential. And we ought to reform our tax system and liberalize our trade. These moves will not solve all of America’s problems—utopia isn’t in the cards—but they will go a long way toward improving growth and, hence, our quality of life.

If legislators instead decide to answer the call for more redistribution, higher tariffs, and stricter regulations, then we risk losing more than wealth.

Notes

1. Tyler Cowen, Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals (Stripe Press, 2018), 3.
2. Tyler Cowen, “The Case for the Longer Term,” Cato Unbound, January 9, 2019, https://www.cato-unbound.org/2019/01/09/tyler-cowen/case-longer-term/.
3. Eli Dourado, “Economic Growth Isn’t Just Ethical. It’s Sublime.,” Cato Unbound, January 16, 2019, https://www.cato-unbound.org/2019/01/16/eli-dourado/economic-growth-isnt-just-ethical-its-sublime/.
4. Brian Ames et al., Macroeconomic Policy and Poverty Reduction , International Monetary Fund and World Bank, August 2001, https://www.imf.org/external/pubs/ft/exrp/macropol/eng/#2.
5. Deirdre N. McCloskey, “The Great Enrichment: A Humanistic and Social Scientific Account,” Social Science History 40, no. 4 (2016): 6–18, https://www.jstor.org/stable/90017881.
6. Douglass C. North and Barry R. Weingast, “Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England,” The Journal of Economic History 49, no. 4 (1989): 803–32, https://doi.org/10.1017/S0022050700009451.
7. Steven C. A. Pincus and James A. Robinson, “What Really Happened During the Glorious Revolution?,” Working Paper No. 17206 (National Bureau of Economic Research, July 2011), https://doi.org/10.3386/w17206.
8. Deirdre Nansen McCloskey, Bourgeois Dignity: Why Economics Can’t Explain the Modern World (University of Chicago Press, 2010).
9. Deirdre Nansen McCloskey, “How Growth Happens: Liberalism, Innovism, and the Great Enrichment” (working paper, Northwestern University, November 29, 2018), 3, https://www.deirdremccloskey.com/docs/pdf/McCloskey_HowGrowthHappens.pdf.
10. US Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, Table 7.1. Selected Per Capita Product and Income Series in Current and Chained Dollars, September 25, 2025, BEA Table 7.1; and US Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts, Table 1.1.4. Price Indexes for Gross Domestic Product, September 25, 2025, BEA Table 1.1.4.
11. Jason Furman (@jasonfurman), “Sometimes I feel like focusing on policies that only affect growth rates by a few tenths of a percentage point feels small,” X, April 17, 2024, 9:45 a.m., https://x.com/jasonfurman/status/1780592423288098927.
12. The source for Furman’s data is Jutta Bolt and Jan Luiten van Zanden, “Maddison Style Estimates of the Evolution of the World Economy: A New 2023 Update,” Journal of Economic Surveys 39, no. 2 (2025): 631–71, https://onlinelibrary.wiley.com/doi/full/10.1111/joes.12618.
13. David Dollar and Aart Kraay, “Growth Is Good for the Poor,” Journal of Economic Growth 7, no. 3 (2002): 195–225, https://link.springer.com/article/10.1023/A:1020139631000.
14. Dani Rodrik, One Economics, Many Recipes: Globalization, Institutions, and Economic Growth (Princeton University Press, 2009), 2.
15. David Dollar et al., “Growth Still Is Good for the Poor,” European Economic Review 81 (January 2016): 68–85, https://doi.org/10.1016/j.euroecorev.2015.05.008.
16. Raj Chetty et al., “The Fading American Dream: Trends in Absolute Income Mobility Since 1940,” Science 356, no. 6336 (2017): 398–406, https://www.science.org/doi/10.1126/science.aal4617.
17. May Wong, “Today’s Children Face Tough Prospects of Being Better Off Than Their Parents, Stanford Researchers Find,” Stanford Report , December 8, 2016, https://news.stanford.edu/stories/2016/12/todays-children-face-tough-prospects-betteroff-parents.
18. Scott Winship, Economic Mobility in America: A State-of-the-Art Primer, Part 3; Trends in the United States, Archbridge Institute, November 2021, https://www.archbridgeinstitute.org/wp-content/uploads/2022/02/Economic-Mobility-in-America_Part-3_ScottWinship-1.pdf; and Scott Winship, “Economic Opportunity and Social Mobility,” National Affairs, Summer 2024, https://www.aei.org/articles/economic-opportunity-and-social-mobility/.
19. Scott Winship, “Was Rising Inequality Behind Falling Absolute Mobility? Reassessing Chetty et al. (2017)” (working paper, American Enterprise Institute, December 1, 2022), 2, 5–6, https://www.aei.org/research-products/working-paper/was-risinginequality-behind-falling-absolute-mobility-reassessing-chetty-et-al-2017.
20. Steven Pinker, Enlightenment Now: The Case for Reason, Science, Humanism, and Progress (Viking, 2018), 328.
21. Benjamin M. Friedman, The Moral Consequences of Economic Growth (Knopf, 2005).
22. See Matt Ridley, The Rational Optimist: How Prosperity Evolves (HarperCollins, 2010); and Pinker, Enlightenment Now. Also, McCloskey’s work on the “Bourgeois Virtues” and the “Great Enrichment” suggests that economic growth and bourgeois values are mutually reinforcing, leading to both material and moral progress. Finally, to the extent that one agrees that freer markets produce more growth, it is worth exploring Virgil Henry Storr and Ginny Seung Choi, Do Markets Corrupt Our Morals? (Palgrave Macmillan, 2019).
23. Alberto Alesina et al., “Political Instability and Economic Growth,” Working Paper No. 4173 (National Bureau of Economic Research, September 1992), https://www.nber.org/system/files/working_papers/w4173/w4173.pdf.
24. Pinker, Enlightenment Now, 329.
25. John H. Cochrane, “How Inflation Radically Changes Economic Ideas,” Finance & Development, March 2024, 29, https://www.imf.org/en/Publications/fandd/issues/2024/03/Symposium-How-inflation-radically-changes-economic-ideas-John-Cochrane.
26. Congressional Budget Office, The Long-Term Budget Outlook: 2025 to 2055 , March 27, 2025, https://www.cbo.gov/publication/61187.
27. Congressional Budget Office, The Long-Term Budget Outlook . These estimates assume that the debt trajectory would not change with stronger real GDP growth. Real GDP growth data are from Congressional Budget Office, The Long-Term Budget Outlook, 32, table 3-1. Projected debt-to-GDP data are from Congressional Budget Office, Key Budget and Economic Data, Long-Term Budget Projections, March 2025, table 1, https://www.cbo.gov/data/budget-economic-data#1.
28. Office of Management and Budget, “Table 7.1—Federal Debt at the End of Year: 1940–2029,” https://taxpolicycenter.org/sites/default/files/statistics/pdf/federal_debt_5.pdf.
29. Office of Management and Budget, “Table 7.1—Federal Debt at the End of Year.”
30. Julien Acalin and Laurence M. Ball, “Did the U.S. Really Grow Out of Its World War II Debt?,” Working Paper No. 31577 (National Bureau of Economic Research, August 2023), https://www.nber.org/papers/w31577.
31. Veronique de Rugy and Arnold Kling, The Five Channels of Debt Reduction: Economic and Policy Tools for Reducing the Debt-toGDP Ratio , George Mason University, Mercatus Center, May 9, 2022, https://www.mercatus.org/research/policy-briefs/fivechannels-debt-reduction-economic-and-policy-tools-reducing-debt-gdp.
32. Paul Krugman, The Age of Diminished Expectations, 3rd ed. (MIT Press, 1997), 11.
33. Nicholas Crafts, “Productivity Growth in the Industrial Revolution: A New Growth Accounting Perspective” (working paper, Federal Reserve Bank of San Francisco, January 2002), 15, https://www.frbsf.org/wp-content/uploads/crafts.pdf.
34. Adam D. Thierer, Evasive Entrepreneurs and the Future of Governance: How Innovation Improves Economies and Governments (Cato Institute, 2020).
35. Arti Rai et al., Patent Reform: Unleashing Innovation, Promoting Economic Growth, and Producing High-Paying Jobs, US Department of Commerce, April 13, 2010, 1, https://www.commerce.gov/sites/default/files/migrated/reports/patentreform_0.pdf.
36. The Economist, “America’s Economic Outperformance Is a Marvel to Behold,” April 13, 2023, https://www.economist.com/briefing/2023/04/13/from-strength-to-strength.
37. Douglass C. North, Institutions, Institutional Change and Economic Performance (Cambridge University Press, 1990), 3; Peter Boettke and J. Robert Subrick, “Rule of Law, Development, and Human Capabilities,” Supreme Court Economic Review 10 (2003): 109–26, https://www.journals.uchicago.edu/doi/10.1086/scer.10.1147140; Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (Basic Books, 2000); Gerald P. O’Driscoll Jr. and W. Lee Hoskins, Property Rights: The Key to Economic Development , Cato Institute, August 7, 2003, https://www.cato.org/policy-analysis/property-rights-key-economic-development; and Robert J. Barro, “Determinants of Economic Growth: A Cross-Country Empirical Study,” Working Paper No. 5698 (National Bureau of Economic Research, August 1996), https://www.nber.org/papers/w5698.
38. John Fernald et al., “The Productivity Slowdown in Advanced Economies: Common Shocks or Common Trends?,” The Review of Income and Wealth 71, no. 1 (2025): e12690, https://onlinelibrary.wiley.com/doi/10.1111/roiw.12690.
39. Eli Dourado, “Notes on Technology in the 2020s,” Eli Dourado , December 31, 2020, https://www.elidourado.com/p/noteson-technology-2020s. Note that as of early 2025, the growth rate since 2005 had been 0.52 percent per year.
40. Noah Smith, “Techno-Optimism for the 2020s,” Noahpinion, December 3, 2020, https://noahpinion.substack.com/p/techno-optimism-for-the-2020s.
41. The Economist, “The Pandemic Could Give Way to an Era of Rapid Productivity Growth,” December 8, 2020, https://www.economist.com/finance-and-economics/2020/12/08/the-pandemic-could-give-way-to-an-era-of-rapid-productivity-growth.
42. Edward Glaeser, “Secular Joblessness,” VoxEU, August 11, 2014, https://cepr.org/voxeu/columns/secular-joblessness. See also Tyler Cowen, The Complacent Class: The Self-Defeating Quest for the American Dream (St. Martin’s Press, 2017); and Scott Winship, “America Is Still Working,” Fusion, September 10, 2024, https://www.fusionaier.org/post/america-is-still-working.
43. Lawrence H. Summers, “Demand Side Secular Stagnation,” The American Economic Review 105, no. 5 (2015): 60–65, https://www.aeaweb.org/articles?id=10.1257/aer.p20151103.
44. Nicholas Bloom et al., “Are Ideas Getting Harder to Find?,” The American Economic Review 110, no. 4 (2020): 1104–44, https://doi.org/10.1257/aer.20180338.
45. Jessica Hamzelou, “What’s Next for mRNA Vaccines,” MIT Technology Review, January 5, 2023, https://www.technologyreview.com/2023/01/05/1066274/whats-next-mrna-vaccines.
46. Adam Thierer, “Artificial Intelligence and Its Potential to Fuel Economic Growth and Improve Governance,” testimony before the US Congress Joint Economic Committee, June 4, 2024, https://www.rstreet.org/outreach/adam-thierer-testimony-hearingon-artificial-intelligence-and-its-potential-to-fuel-economic-growth-and-improve-governance/.
47. Austin Vernon and Eli Dourado, Energy Superabundance: How Cheap, Abundant Energy Will Shape Our Future, Utah State University, Center for Growth and Opportunity, June 30, 2022, https://www.thecgo.org/research/energy-superabundance/. See also Salim Furth, “Why We Need to Achieve Housing Abundance,” Discourse, February 9, 2023, https://www.discoursemagazine.com/p/why-we-need-to-achieve-housing-abundance; and Farming Abundance, “About,” https://farmingabundance.substack.com/about.
48. Eli Dourado, “Seeing on the Far Side of the Moon,” Works in Progress , October 19, 2020, https://worksinprogress.co/issue/seeing-on-the-far-side-of-the-moon/.
49. Eli Dourado, “How to Legalize Supersonic Flight over Land,” Eli Dourado, December 16, 2016, https://www.elidourado.com/p/how-to-legalize-supersonic-flight-over-land.
50. Alex Nowrasteh and David J. Bier, eds., 12 New Immigration Ideas for the 21st Century , Cato Institute, May 13, 2020, https://www.cato.org/white-paper/12-new-immigration-ideas-21st-century.
51. Baltimore’s Francis Scott Key Bridge took five years to build, and it is projected now to take at least 10 years to fully repair. Tom Jackman et al., “Rebuilding Baltimore’s Key Bridge Will Likely Take Years, Experts Say,” The Washington Post, March 27, 2024, https://www.washingtonpost.com/dc-md-va/2024/03/27/baltimore-key-bridge-rebuild-timeline/.
52. Adam Thierer, “Innovation and the Trouble with the Precautionary Principle,” The Daily Economy , April 20, 2020, https://www.aier.org/article/innovation-and-the-trouble-with-the-precautionary-principle/.
53. Dueling estimates make it hard to predict how much more growth the deployment of this new technology could achieve, but it has the potential to affect all aspects of our economy. Erik Brynjolfsson and Andrew McAfee, “The Business of Artificial Intelligence,” Harvard Business Review, July 18, 2017, https://hbr.org/2017/07/the-business-of-artificial-intelligence; Jan Hatzius et al., “The Potentially Large Effects of Artificial Intelligence on Economic Growth,” Goldman Sachs, March 26, 2023, https://www.gspublishing.com/content/research/en/reports/2023/03/27/d64e052b-0f6e-45d7-967b-d7be35fabd16.html; Michael Chui et al., The Economic Potential of Generative AI: The Next Productivity Frontier, McKinsey & Company, June 14, 2023, https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-economic-potential-of-generative-ai-the-next-productivity-frontier; Daron Acemoglu, “The Simple Macroeconomics of AI” (working paper, Massachusetts Institute of Technology, April 5, 2024), https://economics.mit.edu/sites/default/files/2024-04/The%20Simple%20Macroeconomics%20of%20AI.pdf; and Goldman Sachs, “Generative AI Could Raise Global GDP by 7%,” April 5, 2023, https://www.goldmansachs.com/intelligence/pages/generative-ai-could-raise-global-gdp-by-7percent.html.
54. Abundance Institute (@abundanceinst), “Fear is costing us our future,” X, April 21, 2024, 7:25 a.m., https://x.com/abundanceinst/status/1782007871665746078.
55. Cochrane, “How Inflation Radically Changes Economic Ideas,” 29.
56. Adam N. Michel, “Energy Tax Subsidies Could Top $1.8 Trillion,” Cato at Liberty, March 26, 2024, https://www.cato.org/blog/energy-subsidies-tax-code-could-top-18-trillion; US Environmental Protection Agency, “Biden-Harris Administration Proposes Strongest-Ever Pollution Standards for Cars and Trucks to Accelerate Transition to a Clean-Transportation Future,” press release, April 12, 2023, https://www.epa.gov/newsreleases/biden-harris-administration-proposes-strongest-ever-pollution-standards-carsand; and Internal Revenue Service, “Credits and Deductions Under the Inflation Reduction Act of 2022,” February 13, 2025, https://www.irs.gov/credits-and-deductions-under-the-inflation-reduction-act-of-2022.
57. See Salvatore Lazzari, Energy Tax Policy: History and Current Issues, Congressional Research Service, October 30, 2008, https://www.everycrsreport.com/reports/RL33578.html.
58. Brink Lindsey, “End Semiconductor Industrial Policy,” Cato Institute, May 8, 1998, https://www.cato.org/commentary/endsemiconductor-industrial-policy.
59. Marco Rubio, “Why I Believe in Industrial Policy—Done Right,” The Washington Post , April 2, 2024, https://www.washingtonpost.com/opinions/2024/04/02/marco-rubio-industrial-policy-done-right/.
60. Marco Rubio, “Industrial Policy, Right and Wrong,” National Affairs , Spring 2024, https://www.nationalaffairs.com/publications/detail/industrial-policy-right-and-wrong.
61. Arvind Panagariya, Free Trade and Prosperity: How Openness Helps Developing Countries Grow Richer and Combat Poverty (Oxford University Press, 2019); Scott Lincicome and Huan Zhu, Questioning Industrial Policy: Why Government Manufacturing Plans Are Ineffective and Unnecessary, Cato Institute, September 28, 2021, https://www.cato.org/white-paper/questioning-industrial-policy; and Samuel Gregg, “Industrial Policy Mythology Confronts Economic Reality,” Law & Liberty , September 3, 2021, https://lawliberty.org/east-asian-tigers-semiconductors-and-other-industrial-policy-mythologies/.
62. Charles L. Schultze, “Industrial Policy: A Dissent,” The Brookings Review , Fall 1983, https://www.brookings.edu/wp-content/uploads/2016/06/industrial_policy_schultze.pdf.
63. Bentley Coffey et al., “The Cumulative Cost of Regulations” (working paper, George Mason University, Mercatus Center, April 2016), https://www.mercatus.org/research/working-papers/cumulative-cost-regulations.
64. John W. Dawson and John J. Seater, “Federal Regulation and Aggregate Economic Growth,” Journal of Economic Growth 18, no. 2 (2013): 137–77, https://link.springer.com/article/10.1007/s10887-013-9088-y.
65. Germán Gutiérrez and Thomas Philippon, Declining Competition and Investment in the U.S., Working Paper No. 23583 (National Bureau of Economic Research, July 2017), https://www.nber.org/system/files/working_papers/w23583/w23583.pdf.
66. Shikhar Singla, “Regulatory Costs and Market Power,” Working Paper No. 47 (Goethe University, Center for Advanced Studies on the Foundations of Law and Finance, February 23, 2023), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4368609.
67. Dan Ikenson, “Too Much Washington Is What Ails U.S. Manufacturing,” Forbes, May 17, 2024, https://www.forbes.com/sites/danikenson/2024/05/17/too-much-washington-is-what-ails-us-manufacturing/.
68. Bryan Caplan and Ady Branzei, Build, Baby, Build: The Science and Ethics of Housing Regulation (Cato Institute, 2024). See also Bryan Caplan, “The Best Plan for Housing Is to Plan Less,” The New York Times , July 11, 2024, https://www.nytimes.com/interactive/2024/07/11/opinion/housing-deregulation-panacea-policy.html.
69. Edward Glaeser and Joseph Gyourko, “The Economic Implications of Housing Supply,” The Journal of Economic Perspectives 32, no. 1 (2018): 3–30, https://www.aeaweb.org/articles?id=10.1257/jep.32.1.3. The 2019 paper is Chang-Tai Hsieh and Enrico Moretti, “Housing Constraints and Spatial Misallocation,” American Economic Journal: Macroeconomics 11, no. 2 (2019): 1–39, https://www.aeaweb.org/articles?id=10.1257/mac.20170388. For critiques, see Bryan Caplan, “The YIMBY Napkin,” The Volokh Conspiracy, May 15, 2024, https://reason.com/volokh/2024/05/15/the-yimby-napkin/; Brian Greaney, “Housing Constraints and Spatial Misallocation: Comment” (working paper), https://drive.google.com/file/d/1iNdQ2YBfUCbc2uH4p9wdnuoVGhJZLSqe/view; and Brian Greaney, “Response to Hsieh” (working paper), https://drive.google.com/file/d/1lErZpoz6fP45Ufq6JR3edEUX0rGg6MKE/view. See also Gilles Duranton and Diego Puga, “Urban Growth and Its Aggregate Implications,” Econometrica 91, no. 6 (2023): 2219–59, https://onlinelibrary.wiley.com/doi/full/10.3982/ECTA17936.
70. Eli Dourado, “How Do We Move the Needle on Progress?,” Eli Dourado, September 26, 2019, https://www.elidourado.com/p/move-the-needle-on-progress.
71. Eric Olson and Lauren Agpoon, “Simplify Permitting and Unleash Energy Production,” City Journal, February 8, 2024, https://www.city-journal.org/article/simplify-permitting-and-unleash-energy-production.
72. Stand Together, “The U.S. Energy Consumption Debate Is All Wrong. Here’s Why.,” https://standtogether.org/stories/theeconomy/why-policymakers-should-prioritize-energy-abundance.
73. House Committee on Natural Resources, “Modernizing NEPA Through Permitting Reform,” press release, September 11, 2024, https://naturalresources.house.gov/news/documentsingle.aspx?DocumentID=416501.
74. Problem Solvers Caucus, “Problem Solvers Caucus Endorses Bipartisan Permitting Reform Framework,” press release, September 17, 2025, https://problemsolverscaucus.house.gov/media/press-releases/problem-solvers-caucus-endorses-bipartisanpermitting-reform-framework.
75. Jennifer L. Hernandez et al., “Permitting Reform in Action: CEQ Updates Roadmap for Agency NEPA Compliance,” Holland & Knight, October 24, 2025, https://www.hklaw.com/en/insights/publications/2025/10/permitting-reform-in-action-ceq-updatesroadmap-for-agency.
76. Jordan McGillis, “A Culture of Safetyism Chains the CHIPS Act,” City Journal, September 6, 2024, https://www.city-journal.org/article/a-culture-of-safetyism-chains-the-chips-act.
77. John VerWey, No Permits, No Fabs: The Importance of Regulatory Reform for Semiconductor Manufacturing, Georgetown University, Center for Security and Emerging Technology, October 2021, https://cset.georgetown.edu/publication/no-permits-no-fabs/.
78. These statutes include the National Environmental Policy Act; the Endangered Species Act; the Federal Water Pollution Control Act; the Clean Water Act; the National Historic Preservation Act; the Migratory Bird Treaty Act; the Migratory Bird Conservation Act; the Clean Air Act; the Archaeological Resources Protection Act; the Safe Drinking Water Act; the Noise Control Act; the Solid Waste Disposal Act; the Comprehensive Environmental Response, Compensation, and Liability Act; the Resource Conservation and Recovery Act; the Fish and Wildlife Act; the Fish and Wildlife Coordination Act; the Bald and Golden Eagle Protection Act; the Native American Graves Protection and Repatriation Act; the American Indian Religious Freedom Act; and the Federal Land Policy and Management Act. See US Department of Homeland Security, “Determination Pursuant to Section 102 of the Illegal Immigration Reform and Immigration Responsibility Act of 1996, as Amended,” Federal Register 88, no. 192 (October 5, 2023): 69214–15, https://www.federalregister.gov/documents/2023/10/05/2023-22176/determination-pursuant-to-section-102-of-the-illegalimmigration-reform-and-immigrant-responsibility.
79. Erik Brynjolfsson et al., “Navigating the Future of Work: Perspective on Automation, AI, and Economic Prosperity,” American Enterprise Institute, March 20, 2024, https://www.aei.org/research-products/report/navigating-the-future-of-work-perspectiveson-automation-ai-and-economic-prosperity/.
80. Table.Briefings, “Economist Daron Acemoğlu: ‘We Need Effective Rules for AI,”’ January 2, 2024, https://table.media/en/europe/professional-briefing/rediscovering-the-single-market-acemoglu-on-ai-rules-europe-in-schools#Daron; Adam Thierer, “Regulators Are Misguided in Efforts to Restrict Open-Source AI,” Cointelegraph, July 31, 2024, https://cointelegraph.com/news/regulators-misguided-efforts-limit-open-source-ai; and HRTech Series, “One in Three Workers Want AI Banned from the Workplace, While Nearly Half Fear It Will Threaten Their Future Job Security,” press release, September 18, 2024, https://techrseries.com/artificial-intelligence/one-in-three-workers-want-ai- banned-from-the-workplace-while-nearly-half-fear-it-willthreaten-their-future-job-security/.
81. Adam D. Thierer, Getting AI Innovation Culture Right, R Street Institute, March 30, 2023, 2, https://ssrn.com/abstract=4404402.
82. Congressional Budget Office, Key Budget and Economic Data, 10-Year Budget Projections, January 2025, https://www.cbo.gov/data/budget-economic-data#3; and Dominik Lett, “The Senate’s Big Beautiful Blunder Could Increase the Debt by $6 Trillion,” Cato at Liberty, July 2, 2025, https://www.cato.org/blog/senates-big-beautiful-blunder-could-increase-debt-6-trillion.
83. Social Security and Medicare face a $124 trillion deficit in the next 30 years. See Brian Riedl, Spending, Taxes, and Deficits: A Book of Charts , Manhattan Institute, November 12, 2024, 63–64, https://media4.manhattan-institute.org/wp-content/uploads/Budget-Chart-Book-2024.pdf.
84. Dylan Matthews, “The US Government Has to Start Paying for Things Again,” Vox, August 16, 2024, https://www.vox.com/policy/367278/us-national-debt-gdp-government-inflation-solutions-recession.
85. US Department of the Treasury, Bureau of the Fiscal Service, Fiscal Data, “Average Interest Rates on U.S. Treasury Securities,” https://fiscaldata.treasury.gov/datasets/average-interest-rates-treasury-securities/average-interest-rates-on-u-s-treasury-securities.
86. Brian Riedl, “How Higher Interest Rates Could Push Washington Toward a Federal Debt Crisis,” Manhattan Institute, December 22, 2021, https://manhattan.institute/article/how-higher-interest-rates-could-push-washington-toward-a-federal-debt-crisis.
87. Carmen M. Reinhart and Kenneth S. Rogoff, “Growth in a Time of Debt,” The American Economic Review 100, no. 2 (2010): 573–78, https://www.aeaweb.org/articles?id=10.1257/aer.100.2.573.
88. Thomas Herndon et al., “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” Working Paper No. 322 (University of Massachusetts Amherst, Political Economy Research Institute, April 2013), https://peri.umass.edu/images/WP322.pdf.
89. Jack Salmon, “The Impact of Public Debt on Growth,” Cato Journal 41, no. 3 (2021): 487–509, https://www.cato.org/catojournal/fall-2021/impact-public-debt-economic-growth.
90. See, for instance, Gianni Carvelli and Carmine Trecroci, “Government Debt and Economic Growth: Heterogeneity, Asymmetries, and the Role of Net Debt,” Applied Economics 57, no. 46: 1–19, https://doi.org/10.1080/00036846.2024.2392052.
91. Alberto Alesina and Veronique de Rugy, Austerity: The Relative Effects of Tax Increases Versus Spending Cuts, George Mason University, Mercatus Center, March 7, 2013, http://mercatus.org/publication/austerity-relative-effects-tax-increases-versus-spendingcuts. See also Alberto F. Alesina et al., “What Do We Know About the Effects of Austerity?,” Working Paper No. 24246 (National Bureau of Economic Research, January 2018), http://www.nber.org/papers/w24246.
92. Alesina and de Rugy, Austerity.
93. A starting point for the “supply-side” case for boosting growth by lowering tax rates was made by Jude Wanniski in 1978. See Jude Wanniski, The Way the World Works: How Economies Fail—and Succeed (Basic Books, 1978). Robert Mundell provided significant theoretical support for the inverse relationship between marginal tax rates and the pace of economic activity. For an example of Mundell’s thinking, see Robert Mundell, “Nobel Lecture: A Reconsideration of the Twentieth Century,” December 10, 1999, http://www.robertmundell.net/nobel-prize. See also Paul Craig Roberts, Supply-Side Revolution: An Insider’s Account of Policymaking in Washington (Harvard University Press, 1984).
94. Christina D. Romer and David H. Romer, “The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks,” The American Economic Review 100, no. 3 (2010): 763–801, https://doi.org/10.1257/aer.100.3.763.
95. William G. Gale and Andrew A. Samwick, Effects of Income Tax Changes on Economic Growth, Brookings Institution, September 2014, https://www.brookings.edu/wp-content/uploads/2016/06/09_Effects_Income_Tax_Changes_Economic_Growth_Gale_Samwick.pdf.
96. William McBride, What Is the Evidence on Taxes and Growth?, Tax Foundation, December 18, 2012, 2, https://taxfoundation.org/research/all/federal/what-evidence-taxes-and-growth/.
97. Philippe Aghion et al., “On the Returns to Invention Within Firms: Evidence from Finland,” AEA Papers and Proceedings 108 (May 2018): 208–12, https://doi.org/10.1257/pandp.20181108.
98. Erica York, “Tax Reforms to Strengthen America’s Industrial Base,” in Freedom Forward: Limiting Government, Empowering Families, Strengthening American Industry , ed. Michael Thomas Hamilton, Club for Growth Foundation, May 2024, https://clubforgrowthfoundation.org/wp-content/uploads/2024/05/Freedom-Forward-Policy-Handbook_Tax-Reform_final-2.pdf.
99. Daniel Bunn and Elke Asen, Savings and Investment: The Tax Treatment of Stock and Retirement Accounts in the OECD , Tax Foundation, May 26, 2021, https://taxfoundation.org/research/all/global/savings-and-investment-oecd.
100. Adam N. Michel, Slashing Tax Rates and Cutting Loopholes: Options for Tax Reform in the 119th Congress, Cato Institute, June 17, 2024, https://www.cato.org/policy-analysis/slashing-tax-rates-cutting-loopholes; and Tax Foundation, Options for Reforming America’s Tax Code 2.0, 2021, https://taxfoundation.org/research/federal-tax/tax-reform-options/.
101. Francisco Rodríguez and Dani Rodrik, “Trade Policy and Economic Growth: A Skeptic’s Guide to the Cross-National Evi dence,” NBER Macroeconomics Annual 15 (2000): 261–325, https://doi.org/10.1086/654419.
102. Douglas A. Irwin, “Does Trade Reform Promote Economic Growth? A Review of Recent Evidence,” The World Bank Research Observer 40, no. 1 (2025): 147–84, https://doi.org/10.1093/wbro/lkae003.
103. David H. Autor et al., “The China Shock: Learning from Labor Market Adjustment to Large Changes in Trade,” Working Paper No. 21906 (National Bureau of Economic Research, January 2016), https://www.nber.org/system/files/working_papers/w21906/w21906.pdf. See also David Autor et al., “Trade Adjustment: Worker-Level Evidence,” The Quarterly Journal of Economics 129, no. 4 (2014): 1799–860, https://doi.org/10.1093/qje/qju026.
104. US Congress, Joint Economic Committee, Social Capital Project, Reconnecting Americans to the Benefits of Work, October 2021, 31, https://www.jec.senate.gov/public/index.cfm/republicans/analysis?id=50C6EBFB-B2C7-4AB2-BF64-DCDBC0C1E869.
105. US Congress, Joint Economic Committee, Social Capital Project, Reconnecting Americans to the Benefits of Work, 31.
106. Kyle Handley, What Happened to US Manufacturing? The Evidence on Technology, Trade, and Structural Change , Economic Innovation Group, July 2024, https://eig.org/wp-content/uploads/2024/07/TAWP-Handley.pdf.
107. Erica York, Separating Tariff Facts from Tariff Fictions , Cato Institute, April 16, 2024, https://www.cato.org/publications/separating-tariff-facts-tariff-fictions.
108. Erica York and Alex Durante, Trump Tariffs: Tracking the Economic Impact of the Trump Trade War , Tax Foundation, October 31, 2025, https://taxfoundation.org/research/all/federal/trump-tariffs-trade-war/.
109. “The majority of U.S. imports are not final consumer goods but intermediate goods used by domestic firms in their production. Any trade restriction that increases the price of an intermediate good raises the costs of production in downstream user industries with an adverse effect on employment in those industries.” Douglas A. Irwin, Free Trade Under Fire, 5th ed. (Princeton University Press, 2020), 100.
110. Alessandro Barattieri and Matteo Cacciatore, American Protectionism and Construction Materials Costs, Cato Institute, February 9, 2022, https://www.cato.org/briefing-paper/american-protectionism-construction-materials-costs; and Scott Lincicome, “Dumping on American Builders and Homebuyers,” Cato at Liberty , February 9, 2022, https://www.cato.org/blog/dumpingbuilders-homebuyers.
111. US Census Bureau and US Department of Commerce, “U.S Goods Trade: Imports and Exports by Related-Parties, 2023,” press release, July 3, 2024, https://www.census.gov/foreign-trade/Press-Release/related_party/rp23.pdf.
112. Fariha Kamal, “Why Broad-Based Import Tariffs Can Hurt Exports and Manufacturing Jobs,” Briefing Book, November 4, 2024, https://substack.com/home/post/p-151056758.
113. Office of the United States Trade Representative, “Free Trade Agreements,” https://ustr.gov/trade-agreements/free-tradeagreements.
114. Veronique de Rugy, “Export Subsidies,” in Free Trade in the Twenty-First Century: Economic Theory and Political Reality , ed. Max Rangeley and Daniel Hannan (Springer, 2025).
115. Douglas A. Irwin, “Interpreting the Tariff-Growth Correlation of the Late 19th Century,” The American Economic Review 92, no. 2 (2002): 165–69, https://www.aeaweb.org/articles?id=10.1257/000282802320189186; and Phillip W. Magness, The Problem of the Tariff in American Economic History, 1787–1934 , Cato Institute, September 26, 2023, https://www.cato.org/publications/problem-tariff-american-economic-history-1787-1934.
116. Cecil E. Bohanon and T. Norman Van Cott, “Tariffs, Immigration, and Economic Insulation: A New View of the U.S. Post–Civil War Era,” The Independent Review 9, no. 4 (2005): 529–42, https://www.jstor.org/stable/24562083.
117. Joseph P. Ferrie, “A Historical Perspective on High-Skilled Immigrants to the United States, 1820–1920,” in High-Skilled Immigration in a Global Labor Market, ed. Barry R. Chiswick (AEI Press, 2011).
118. Francine D. Blau and Christopher Mackie, eds., The Economic and Fiscal Consequences of Immigration (National Academies Press, 2017), https://www.nationalacademies.org/read/23550.
119. Diana Roy, “How Does Immigration Affect the U.S. Economy?,” Council on Foreign Relations, October 30, 2024, https://www.cfr.org/in-brief/how-does-immigration-affect-us-economy.
120. Michael A. Clemens, “The Effect of International Migration on Productivity: Evidence from Randomized Allocation of U.S. Visas to Software Workers at an Indian Firm,” Open Philanthropy, December 3, 2012, https://www.openphilanthropy.org/wpcontent/uploads/Clemens-2012-RCT.pdf.
121. Michael A. Clemens, “Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?,” The Journal of Economic Perspectives 25, no. 3 (2011): 83–106, https://www.aeaweb.org/articles?id=10.1257/jep.25.3.83.
122. David Henderson, “Bryan Caplan Understates Case for Immigration,” Library of Economics and Liberty , August 21, 2024, https://www.econlib.org/bryan-caplan-understates-case-for-immigration/.
123. Stuart Anderson, “55% of America’s Billion-Dollar Startups Have an Immigrant Founder,” Forbes, February 4, 2019, https://www.forbes.com/sites/stuartanderson/2018/10/25/55-of-americas-billion-dollar-startups-have-immigrant-founder/#57b4053b48ee.
124. Shai Bernstein et al., “The Contribution of High-Skilled Immigrants to Innovation in the United States,” Working Paper No. 30797 (National Bureau of Economic Research, December 2022), https://www.nber.org/papers/w30797.
125. National Foundation for American Policy, Immigrants and Nobel Prizes: 1901–2023 , October 2023, https://nfap.com/wpcontent/uploads/2023/10/Immigrants-and-Nobel-Prizes-1901-to-2023.NFAP-Policy-Brief.October-2023.pdf.
126. James Pethokoukis, “5 Questions for William Kerr on High-Skill Immigration and H-1B Visa Reform,” AEIdeas, January 11, 2019, https://www.aei.org/economics/how-the-us-can-compete-for-global-talent-a-short-read-qa-with-william-kerr/.
127. Britta Glennon, “How Do Restrictions on High-Skilled Immigration Affect Offshoring? Evidence from the H-1B Program,” Management Science 70, no. 2 (2024): 907–30, https://pubsonline.informs.org/doi/epdf/10.1287/mnsc.2023.4715.
128. Noah Smith and Minn Kim, “Skilled Immigration Is a National Security Priority,” Noahpinion, July 11, 2024, https://www.noahpinion.blog/p/skilled-immigration-is-a-national.
129. David J. Bier, “Unlocking America’s Potential: How Immigration Fuels Economic Growth and Our Competitive Advantage,” testimony before the Senate Committee on the Budget, September 13, 2023, https://www.cato.org/testimony/unlocking-americaspotential-how-immigration-fuels-economic-growth-our-competitive.
130. Anna Maria Mayda et al., “The Effect of the H-1B Quota on Employment and Selection of Foreign-Born Labor,” Working Paper No. 23902 (National Bureau of Economic Research, October 2017), https://www.nber.org/papers/w23902.
131. Sari Pekkala Kerr et al., “Skilled Immigration and the Employment Structures of US Firms,” Journal of Labor Economics 33, no. 3, pt. 2 (2015): S147–S186, https://www.jstor.org/stable/10.1086/678986.
132. Giovanni Peri et al., “STEM Workers, H-1B Visas, and Productivity in US Cities,” Journal of Labor Economics 33, no. 3, pt. 2 (2015): S225–S255, https://www.journals.uchicago.edu/doi/10.1086/679061.
133. Noah Smith, “Indian Immigration Is Great for America,” Noahpinion, December 26, 2024, https://www.noahpinion.blog/p/indian-immigration-is-great-for-america.
134. Alessandro Caiumi and Giovanni Peri, “Immigration’s Effect on US Wages and Employment Redux,” Working Paper No. 32389 (National Bureau of Economic Research, April 2024), https://www.nber.org/system/files/working_papers/w32389/w32389.pdf.
135. Mark Colas and Dominik Sachs, “The Indirect Fiscal Benefits of Low-Skilled Immigration,” The American Economic Journal: Economic Policy 16, no. 2 (2024): 515–50, https://www.aeaweb.org/articles?id=10.1257/pol.20220176.
136. Michael A. Clemens et al., “Immigration Restrictions as Active Labor Market Policy: Evidence from the Mexican Bracero Exclusion,” The American Economic Review 108, no. 6 (2018): 1468–87, https://www.aeaweb.org/articles?id=10.1257/aer.20170765.
137. Benjamin M. Friedman, The Moral Consequences of Economic Growth (Vintage Books, 2006), 16.