President Donald Trump's budget is dead on arrival and, my conservatism notwithstanding, that is a good thing.
U.S. economy is beset by negative structural forces beyond our borders. Growth is slowing, a recession is becoming a real risk, and the totality of the president's budget cuts is ill-advised. Instead, he should articulate an agenda that challenges the Congress to keep the recovery on track.
China's flagging economy won't be resurrected by any trade deal hatched by Presidents Trump and Xi. The communist leader has imposed more state controls that breed corruption and waste, and burden provincial governments and private businesses with a mountain of debt.
Repeated injections of credit and fiscal stimulus won't solve that mess.
Europe remains obsessed with preserving dysfunctional macroeconomic policies required to sustain a euro that promotes German exports but is overvalued for less dynamic southern European economies.
Italy is slipping into recession, and growth elsewhere remains perilously close to zero. Brussels' obsession with punishing Britain for Brexit and Theresa May's unimaginative leadership leaves the island nation struggling.
More European Central Bank stimulus is like an opioid for a cancer patient. It relieves pain but will not reverse the inevitable-the ultimate collapse of the EU as a global force.
No surprise, U.S. imports are growing more rapidly than exports, and the trade deficit jumped 10% last year. That taxes U.S. growth, and armistices pausing Trump's trade wars won't significantly alter the reality that revving up U.S. growth requires boosting domestic demand and addressing skilled labor shortages.
Democratic senators running for president see all this and are promoting socialist solutions. Each has embraced the Green New Deal, which requires de facto government takeovers of the automotive, banking, health care, education and energy sectors and a Maoist iron rice bowl-a guaranteed basic income for all.
Americans are not that radical.
Democrats won the House with moderate candidates promising to work for practical solutions to improve health care and transportation and to reform immigration. The latter touches a cultural nerve in ways Washington's aging political class and Northeast liberals simply don't grasp.
U.S. prescription drugs are rising at nearly double the rate of inflation-even after all the discounts to pharmacy-benefit-managers that the drug companies like to blame. The White House should challenge Congress with pre-drafted bills; for example, one that explicitly links U.S. drug prices to those charged in Germany.
Similarly, the administration should offer a bill ending Big Pharma's penchant for suing generic manufactures and forcing agreements that delay generics and limit competition. And perhaps investigate a few CEOs for outright price fixing.
Trump's $1.5 trillion dollar infrastructure plan got little traction because it is full of questionable right-wing ideas-for example, private toll roads too often fail. And it didn't specify how the $200 billion federal contribution would be funded.
After 25 years at 18.4 cents per gallon, it's time to raise the gas tax 25 cents and offer the proceeds to the states on a per capita basis to do as they please if they match with new money and spend what they receive within 12 months. Each dollar of tax collected, if spent immediately, would boost gross domestic product by the same amount and create good-paying middle-class jobs.
Trump should de-emphasize the border wall. He doesn't have the votes in Congress and the courts will decide if his national emergency is legitimate.
Instead, offer a grand deal on legal immigration-permanent status for DACAs if the Democrats will agree to reform family reunification rules and replace the visa lottery with a system that emphasizes badly needed STEM skills.
Trump needs to move to the center on those issues with simple understandable proposals in ready drafted bills. Then challenge Leaders Nancy Pelosi and Mitch McConnell to put those to up or down votes and hammer them relentlessly when they delay.
These are hard swallows for many in Congress but all would help lift wages right away and make Trump the pragmatist in the face of a do-nothing Congress that only bickers, investigates and complains.
All should be pitched as initiatives to improve the conditions for working Americans-the folks who will ultimately determine the occupant of the Oval Office in 2021.
Peter Morici is an economist and business professor at the University of Maryland, and a national columnist. He tweets @pmorici1
© 2021 Newsmax Finance. All rights reserved.