Reigniting the American Dream is essential to strengthening our country: taking three specific steps can help.
The American Dream itself rests upon our providing, as best we can, equal opportunity to all our citizens. Education and jobs are still the best way to achieve this. Much of our education system no longer truly meets our country’s promise that its students graduate with the skills they need to attain a good job.
In a number of our inner city and rural high schools, under 50% of the students graduate, and those who do often don’t have the skills they need to hold a well-paying job. Increasingly, poverty has become intergenerational.
High schools and colleges should be judged by their outcomes — do the students graduate with job offers, and what do they pay?
The growth of America was always driven by productivity that matched capital investment with skills, which is also the driver of individual income. Fortunately, to fix our problems, all we need to do is reorient what we do today. No investment is required. It is essentially free; we just need to redirect existing resources (the United States spends almost $1 trillion a year on K–12 education) into better outcomes.
We know exactly what to do, though systems change is hard. There are millions of jobs available for which training could be done in high school, community college or special programs outside of school. For example, there are training programs lasting 12–24 weeks in computer science, advanced manufacturing, cyber, data science, program management, and nursing and healthcare-related areas, among others. These trainings should be certified and counted as credits for an undergraduate or graduate education. Many unions run excellent apprenticeship and training programs that certify workers for badly needed high-skilled jobs like welding, electrical work, plumbing and others. These jobs can pay well in excess of $100,000 a year.
The federal government should use its considerable power to ask every school to report on the jobs and income levels that their students achieve when they leave school. This alone would put tremendous pressure on schools to become accountable — everyone would be seeking out best practices so as not to be left behind. I would even consider tying teacher and administrator compensation to these goals.
We should double the Earned Income Tax Credit, which raises the income of our lowest-paid citizens, creates better social outcomes and has the virtue of incenting employment.
It is clear that, over the decades, the income levels of low-wage workers have not kept up with general growth and overall salaries despite the fact that their work is still essential. It is also clear that in any economy, there are groups of people who are struggling to get ahead. Approximately 23% of American workers make less than $17 an hour. And close to 10% have an income of $20,000 a year or less, partially because they only have part-time jobs. Some surveys show that over 60% of workers today are living paycheck to paycheck, that hourly workers have less predictable incomes and that 35% of households with incomes below $50,000 spend 95% on necessities these conditions are likely very stressful for many families. We need to fix this.
Dramatically expanding the Earned Income Tax Credit (EITC) does not help everyone, but it would go a long way in helping those who need it most. The tax code could play an important role in easing the stress of individuals and families at the bottom of the economic ladder. One way the code could incentivize labor force participation is to expand and reform the EITC. The EITC gives an individual earning $18,000 a year with two children a maximum tax credit of $7,152 (and with no children a maximum tax credit of $649). The average EITC across all recipients is approximately $2,900, and close to 20% of eligible taxpayers don’t apply. I would double this tax credit and remove the child requirement. I would effectively make it a negative monthly income tax as opposed to a year-end credit. (It’s also important that any tax credit and social benefits program be properly phased in so it is both fair and it doesn’t dis-incent work.)
While this would cost a lot of money, it has many excellent virtues. It would give those with lower income far more money to spend, without government interference, on what they and their families need — education, food, better housing and so on. And much of it would be spent locally, in lower-income neighborhoods. This plan has the benefit of both rewarding work and bringing more people into the workforce, which would grow GDP. Jobs not only bring dignity but better social outcomes in terms of less homelessness and crime, improved health outcomes and more household formation, among other upsides. For many people, that first job is just the first rung on the ladder of a career. I have little doubt that this plan would more than pay for itself over time. Many Republicans and Democrats support this proposal as it helps to create the American Dream for many people.
Now that we have strong border control, we should finish proper immigration reform.
Uncontrolled immigration is highly disturbing to affected populations around the world and reduces the ability to manage legal and needed immigration. In the United States, the number of immigrants has increased by more than 60% over the last 25 years. Since we have finally gained control of our borders, I believe most Americans would support the following: increasing merit-based immigration, allowing anyone who earns a degree here to stay, ensuring there are proper visas for seasonal workers, enabling children born in this country to remain and providing a rigorous path to citizenship for law-abiding, undocumented immigrants.
Healthy and proper immigration would bring great talent to our country and has been shown to actually help grow the economy. There are over 150,000 foreign students who receive a degree annually in science, technology, engineering or math but have no guaranteed way of staying here for the long term, although many would choose to do so. Most students from countries outside the United States pay full freight to attend our universities, but many are forced to take the skills they learned here back home. From my vantage point, that means one of our largest exports is brainpower.
The last time we had major immigration reform was in 1986 under President Reagan. There have been two times in the last 20 years when Congress almost passed an immigration reform bill that looks a lot like what I outlined above. Let’s just get it done this time.
The Congressional Budget Office estimated that the failure to pass immigration reform is costing us 0.3% of GDP a year. Immigration has been one of the great strengths of this country — we should never forget that.
Good U.S. foreign economic policy ensures that America is first (though not alone) — it strengthens the U.S. economy and that of our critical allies.
The goal of U.S. economic foreign policy should be twofold (after protecting national security):
- Maximize the growth and competitiveness of America — both in the United States and for our companies doing business internationally.
- Simultaneously strengthen our allies economically and bind them closer to the United States and like-minded Western democracies.
Economic weakening of the world’s democracies or a fragmentation of their economic bonds could lead to truly adverse consequences. This is precisely what some of our adversaries and many autocratic nations want — it is their stated objective. They would like to see all of our allies far less dependent on the United States and therefore far more dependent on them. In this scenario, many countries would be compelled to seek deeper economic bonds with some possible bad actors — over time, they could become vassals of these countries and unable to avoid coercion from them. The following are a few ideas on how we can promote healthy economic engagement (and combat unfair trade) while strengthening both our own and our allies’ economies. And I will leave you with one big, bold idea.
There are many ways to promote good U.S. foreign economic policy.
America’s ties with the rest of the world are already extensive (see U.S. global foreign direct investment and portfolio investment), and the levers to accomplish our foreign policy goals extend to tax policy (and our international competitiveness), investment policy and trade policy, which encompass tariffs, quotas, regulatory barriers, immigration policies and so on. While tariffs have certainly “brought people to the table” and have allowed us to start to correct some of our past bad trade practices, we need to look at U.S. foreign economic policy comprehensively. The ultimate goal should be to create a system with our allies of stability and consistency, in addition to fairness and mutual benefit.
Not only should our foreign economic policy help us grow as a nation, but it should also help other countries grow. For example, the United States has the best capital markets in the world, large and small, public and private, and we have already described how proper capital formation and allocation are key to America’s vibrant economic system. Another goal of our foreign economic policy should be to help other countries develop their capital markets. In addition, there are excellent economic policies found elsewhere in the world, and we should emulate them to help more countries thrive.
Even the proper use of strategic communications can foster entrepreneurship and the universal principles of freedom, which will also drive growth and prosperity.
The United States does not do enough to foster American business expansion overseas, particularly in complex parts of the world. Most other nations, China in particular, encourage the growth of their companies overseas. China, through their Belt & Road Initiative and basic foreign direct investment (see Size of the Financial Sector/Industry chart above 29), has massively invested, particularly in emerging and developing countries around the world. America has recently begun to expand its development finance institution and its Export-Import Bank to help U.S. businesses grow overseas. This should be encouraged.
We need to combat unfair trade — and strive for free and fair trade.
For hundreds of years, countries have used trade practices to get a leg up on other countries. This economic competition is often exercised through industrial and trade policy, and it comes in many forms: banning or limiting trade (quotas), tariffs, subsidies, grants, tax credits or accelerated depreciation, loan guarantees, long-term purchase agreements and capital controls. There are also other unfair trade practices that need to be mentioned; e.g., nontrade barriers, such as regulations that effectively stop specific types of trade and various unfair tax policies that range from value-added taxes to a particular country’s tax schemes. Practices such as permitting countries to circumvent trade restrictions imposed on them — for example, allowing any country to use agreements it has with other nations to bypass tariffs on their goods — can and should be stopped.
All of these trade practices are generally used as tools to give a company or an industry an unfair competitive advantage, and when used together, they can create unbeatable economies of scale. In their harshest form, trade practices can be used by countries as a tactic to try to unfairly dominate whole industries. This should not be allowed.
Trade agreements have many flaws and need to be carefully negotiated. Had the World Trade Organization done its job well, we would not have such serious trade issues — it is in need of serious reform. Obviously, where the United States is treated unfairly, we should demand that those agreements be fixed. It would also be good to acknowledge that we have sometimes treated others unfairly (for example, parts of the Inflation Reduction Act unfairly favor American business).
We also need to acknowledge that there have been real negative job impacts as a result of trade (in 1990, there were 18 million jobs in manufacturing in this country versus 13 million today), which are usually concentrated around certain geographic areas and businesses. The loss of these jobs also had a serious negative effect on social outcomes, including depression, divorce and others.
However, the worst outcome to trade’s evolution over the past several decades is that Americans have become too dependent on some nonaligned foreign countries for many things essential to our national security and resiliency. This extends, as mentioned previously, from rare earths to the manufacturing of semiconductors. Unfortunately, we need industrial policy to remedy this.
America already trades with more than 200 countries and territories. We should strike the best — and, of course, the most fair — trade agreements that we can. We can do this while maintaining our close economic relations with our allies.
Industrial policy has become a necessary tool now, but it should be done right. It should be limited and market-based.
Unfortunately, we need industrial policy to guarantee our national security and resiliency. And it also could be used to combat unfair mercantilist policies around critical industries. These policies uniquely could be completely unilateral.
Industrial policy mechanisms, when used, should be as targeted and as simple as possible. They come in many guises: grants, cheap loans, equity investing, purchase agreements and others. The cleanest of these is tax credits in various forms. Whatever the policy, two rules should not be violated: (1) there should be no social engineering — this is not a jobs program (the Jones Act meant to preserve jobs in the Merchant Marine has basically destroyed our Merchant Marine and merchant ship building business) and (2) for the most part, the market should allocate capital, not the government. Industrial policy can easily devolve into a buffet where corporate America gorges at the expense of the taxpayer. While there are certain circumstances that require the government to allocate capital (think infrastructure and national security), generally the government is simply not good at allocating capital in a free market. America does best not with central planning but with consistent and clear policies that are conducive to growth.
The reason we need industrial policy is because many of the things we need to do for national security would fail without government support. It just needs to be designed wisely. The question, however, is: What conditions require industrial policy and what guardrails are needed so the policy does not grow unchecked and distort the free market?
Trade is increasingly complex, and the United States needs to stay deeply engaged.
Trade is very complex and constantly changing. I have no doubt that other nations will be thinking about their future trade policies as they try to adjust to demands from both the United States and China, as well as weigh their own national security needs. It is in our country’s interest that our allies remain economically tied to the United States. Many nations have joined, or are negotiating to join, large transregional free trade groups. Europe, for goods, is already essentially one, and the European Union (EU) signed a free trade agreement with India and the EU-Mercosur Partnership Agreement, a large free trade agreement with Argentina, Brazil, Paraguay and Uruguay. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership is another large free trade agreement between 12 countries in the West and Indo-Pacific. Being excluded from an increasing number of these free trade agreements will, over time, weaken America’s competitiveness and companies. It will also mean that America will not have a seat at the table when policies, strategies and processes are being established. Therefore, I believe formulating trade agreements should be drawn up alongside our allies if possible.
America needs Europe to succeed — and it’s currently on a bad path.
It is very hard to predict the future, and even when we analyze history, hindsight is not 20/20. We still analyze the disintegration of the Roman Empire, the British Empire, the Chinese Empire and the failures after World War I that led to Nazi Germany. However, there are major trends that we should study — they are like shifting tectonic plates that can determine the future course of history.
I believe we are staring one in the face: the slow but constant decline and fragmentation of Europe. Europe is entering a decisive decade, and it is unable to act. The EU was an extraordinary accomplishment —nations coming together and using political and peaceful means to settle differences. And this after a millennium of terrible wars. It worked, but it only went halfway. Europe never finished the economic union (see the Draghi report), which meant that European countries constantly underperformed economically. This has led to their GDP relative to the United States going from 90% in the year 2000 to approximately 70% today. This fragmentation remains a structural drag on competitiveness. As former European Central Bank President Mario Draghi has noted, internal EU market barriers function like “hard tariffs” of approximately 45% for manufacturing and 110% for services. Those barriers reflect not a failure of ambition but rather a failure of integration. This has led to a lack of scale for their major businesses and a lack of mobility for both capital and people.
EU nations also created whole new layers of bureaucracy that reduced innovation, growth and investment among other things. This will continue unless European leaders dramatically change course. If they don’t, they will eventually be unable to afford their social safety nets, restrengthen their nations’ militaries and grow their economies. The EU is currently home to world-class companies, deep pools of savings and a talented workforce. But without new EU direction, their major global companies will weaken, faced with very strong American and Chinese competition. The ultimate loser in all this will be Europe and all its citizens — and it will hurt the United States as well.
Europe and America are each other’s largest trade partners at $2 trillion a year. The United States and Europe remain the twin engines of the world economy, with the transatlantic relationship reaching a record $9.8 trillion in 2025. While America and Europe do have real differences, we believe that a stronger Europe, militarily and economically, is in America’s self-interest.
Europe needs to rebuild its military and its defense industrial base.
Almost all European countries have dramatically increased their budgets to strengthen their militaries — all allies now meet or exceed their current North Atlantic Treaty Organization (NATO) commitments. We can and should clarify and reaffirm NATO’s goals and mission. The goal should be to end up with a far stronger NATO and fit for purpose.
Yet Europe’s defense industrial base is still not fit for purpose. This is as much an economic and industrial challenge as a military one. The continent needs enduring production capacity, coordinated procurement and dual-use manufacturing that serves both commercial and defense sectors.
Europe’s defense will also benefit from maintaining the deep interconnectedness with the United States that has anchored Euro-Atlantic security for decades. Efforts to grow Europe’s defense industrial base should avoid measures — such as strict “Buy European” content requirements — designed to favor EU suppliers but that end up shutting out U.S. firms and, with them, the small- and medium-sized suppliers that many European defense manufacturers still rely upon.
Europe will have a hard time competing with the United States on the large-scale production of certain very advanced military capabilities, like nuclear submarines, advanced airplanes, military intelligence and satellites among others. They should rely on our country for this, which means we need to be totally reliable. European nations should focus on the types of things they can build very effectively, like drones, tanks, armaments and others. They do, however, need to do this efficiently — not inefficiently. They do this now by, for example, building 14 different types of tanks all over the continent. The military equipment of NATO needs to be interoperable. While they need several manufacturers to compete to build most types of equipment, they should not have so many that it’s highly inefficient. And while the successful manufacturers can have plants in different countries, this should not be treated as a jobs creation program.
Finally, a transatlantic approach to some defense production — such as RTX’s partnership with Germany’s Diehl Defence on air defense systems — will deliver more scale, more interchangeability and more capability than any go-it-alone model.
We need one big, beautiful trade deal for Europe.
The United States should do whatever it can to help — or even push — Europe to take all necessary steps to reverse its decline and strengthen its economy. We should support them to act on what is in their own self-interest: adopting the reforms in the Draghi report. For example, strengthening the EU’s internal market structure — through completion of the Capital Markets Union and Banking Union — would be transformative for Europe’s ability to scale and compete. A more integrated financial system would unlock investment for strategic industries; enhance stability and reduce fragmentation costs; enable more European banks to compete globally; and make the continent a more attractive environment for foreign firms. For companies like ours, it would create tougher competition (which in the long run is good), but it would also enable us to serve clients more efficiently across borders — lowering complexity, improving capital allocation and, ultimately, increasing growth.
I know this is a long shot, but we could offer Europe one unbelievable inducement: If it commits to economic and military reforms, the United States would negotiate one big, beautiful free trade agreement with all of Europe. If I could, I would throw in similar action with Australia, Japan, the Philippines, South Korea and other nations. This would be an economic and geopolitical home run for the United States and for Europe, allowing us to set the global rules around trade (if you want to access to over 40% of the world’s market), and it would bind Western allies together in the face of autocratic pressure.
We tried this before in the so-called T-TIP (Transatlantic Trade and Investment Partnership) proposal a decade ago. Clearly, it would be hard to do because we would need to resolve existing tax and regulatory issues around digital services, as well as extraterritorial regulations around climate reporting (the highly misguided Corporate Sustainability Due Diligence Directive disclosure rules). And of course, we are all going to have to be a little flexible about one of the most challenging issues — agriculture — but with hard work, all of these concerns could be resolved. And the benefits would be enormous. Doing big things is never easy.
Strong American leadership is required – there is no real alternative.
Some political leaders have said that there is a “rupture” between America and the Western world — that the red lines have been crossed and there is no return to the prior system. I completely disagree. There is no practical replacement to the prior system. It has not ruptured, but it needs reform. The middle-sized nations do not have real alternatives in terms of building a unified military or a unified economy that can compete effectively with the United States and China. If these middle nations did, the result would look a lot like what Europe is today: dysfunctional. The only practical alternative is to fix the current situation.
The United States and Europe have an extraordinary number of commonalities, including values deeply held. For more than 75 years since the end of World War II, the United States and Europe have worked together to resolve most major global economic or military challenges and in fighting terrorism and nuclear proliferation. We need this cooperation for the next 75 years.
I do not want to contemplate the opposite. Without American leadership, there would be a huge vacuum. If not us, who? We are the only country that has the capability to do it. Fragmented relationships with and among our extensive allies could lead to an “every nation for themselves” mentality. America would become more isolated, the U.S. dollar would no longer be the world’s reserve currency and autocratic nations would rejoice. Need I say more?
We need to strengthen our commitment to the values and virtues that created America and to the Constitution, which embeds these values in law.
“We hold these truths to be self-evident, that all men are created equal.”
“That they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
“With liberty and justice for all.”
The Constitution is the legal embodiment of the values and principles that define America. We pledge allegiance to the Constitution, but it’s the values that are the true foundation of America’s success.
The values we uphold unite us.
Our country’s values transcend any political stance — libertarian, conservative, progressive, Democrat or Republican. These values reach deep into American life: to provide justice and equal opportunity to all, to try to lift up all of our citizens, to dedicate to a strong national defense, to promote free enterprise, to have freedom of religion, and to respect family, country, self-reliance, labor and laborers, and common sense. These values are not mutually exclusive and should be embraced and upheld by all of us.
We need to be stronger.
These principles allow individuals to pursue life as they lawfully see fit. These extraordinary legal rights come with important civic responsibilities. To be able to address our problems at home and abroad, we must be strong. And our core strength is based upon our commitment to our values. If the soul of America is not strong, then the rest will be weak.
While we should acknowledge America’s flaws, they should not be used to pull apart our country. We need to believe in ourselves and get back to work, not tear each other down. Many of the blind ideologies being bandied about run counter to our fundamental principles. Ideologues often adhere to rigid beliefs and, when extreme, seek to impose those beliefs on others; in radical forms of fanaticism, there is no room for individual differences. While we should listen to all people and all viewpoints, we should not allow ourselves to become weaponized. We should fight blind ideologies, like anti-Semitism, and any form of racism however and whenever it rears its ugly head.
I believe we have gotten a little too soft. Working hard, having ambition, demonstrating self-responsibility and loving your nation (particularly this nation) are wonderful qualities. We need to rededicate ourselves to these values. Proper civic engagement should better reflect President Kennedy’s statement, “Ask not what your country can do for you, but what you can do for your country.”
We also cannot forget that we have to deal with the world we have — not the one we want. Directly related to our values should be our strong commitment to defending them, including militarily. Tough minds and realpolitik are absolutely required in our complex world and in our global relationships.
It is incumbent on us to educate ourselves, our fellow citizens and future generations — starting in grammar school — about American values, our history and our ongoing pursuit of a more perfect democracy.
