Conservative economics wants to create new entitlements for child support, expansion of Medicaid, and expansion of access to child care. The cost of the proposed new entitlements would exceed $3 trillion over a 10-year period. The U.S. already has a structural deficit of 5%-6% of the GDP.
The movement believes in industrial policy, and it believes in protectionism. The problem with this approach? The risks are clear. In 1930, Congress and then-President Herbert Hoover chose protectionism. Congress passed the Smoot-Hawley Tariff Act, which raised tariffs against imports. Other nations responded, a global trade war ensued, and the Great Depression deepened. Today, the Biden administration’s protectionist policies regarding manufacturing and inputs to the green economy are seeding the soil of the world economy for another global trade war.