This week President Bush focused on social security and overhauling the tax code during a two-day economic conference at the White House. Unless changes are made, the Social Security Trust Fund that funds social security could run out of money by the year 2042. Although 2042 seems so far away, 38 years isn’t that far into the future. I personally am not counting on social security to be there for me and my spouse when I retire. I will have other sources of income that will support me and my spouse after I retire. It’s supposed to be a social safety net, but it is a shaky one for those of us whose retirement is far down into the future. The fact that the president is even broaching such a hot-button issue as social security is gutsy. The system does need to be changed so that it remains solvent after the year 2042. Nevertheless, at present I believe other domestic economic concerns are more pressing and need to receive higher priority than social security or tax code reform. They should be prioritized as follows:
- Reduce the federal budget deficit. President Bush has made a pledge to reduce the current account deficit by 50%. He needs to make this his top economic priority. Over-reliance on foreign investors to buy U.S. debt is dangerous.
- Bring down the trade deficit. The president needs to leverage America’s strengths and fight battles for the country in forums such as the WTO to reduce the nation’s trade deficit. This is not a problem he created; he inherited it from his father and President Clinton. He needs to come up with a solid plan for narrowing the trade gap beyond currency devaluation.
- Focus on energy self-sufficiency. It is in the interest of the U.S. to decrease its dependence on foreign oil. The president needs to evaluate all options ranging from conservation to fuel cells to domestic drilling to minimize energy consumption and maximize domestic production. Purchasing foreign oil contributes to both #1 and #2 above.
- Promote job creation. The president needs to focus on creating good domestic jobs. Foreign outsourcing and productivity have put pressure on job creation, leading to fewer good, long-lasting domestic jobs. I add “long-lasting” because job creation must focus on creating domestic jobs that can withstand an economic downturn. Job creation during the second Clinton administration was impressive, but these jobs did not survive the dot.com bust. Those types of jobs are not what the economy needs. Jobs that can be easily outsourced such as traditional manufacturing jobs are not what the economy needs. Good jobs with staying power need to be created in fields the U.S. dominate, including technology, services, and biotechnology.
These economic issues should receive highest priority during the second Bush administration. Focusing on social security and tax code reform are fine as long as these basic priorities are first addressed.