President-elect Donald Trump won't take the oath of office until Jan. 20, but that is not stopping him from trying to clean up the economic mess his predecessor is leaving behind.
On Wednesday, Trump met with tech titans to discuss job creation and innovation. Just before that roundtable discussion at Trump Tower, the CEO of IBM, who attended the meeting, announced that her company is going to create 25,000 new jobs and invest more than $1 billion right here in America over the next four years.
President-elect Trump promised the American people that he's going focus on job growth, and that's what he's doing.
Last week, Trump announced that Japan's SoftBank will invest $50 billion into America's economy. That will create 50,000 new jobs. And of course, last month, Trump cut a deal with air conditioner manufacturer Carrier to save over 1,000 jobs that the company was planning to ship to Mexico.
This is a great start. But the truth is this: The president-elect has his work cut out for him. President Obama's policies have been a complete and utter disaster. Consider where Donald Trump is starting:
We now have the lowest labor force participation rate since the 1970s, 95 million Americans are out of work, we are in the weakest recovery since the 1940s, we have the lowest home ownership rate in 51 years, there are 13 million more Americans on food stamps in the last eight years, we have 43 million Americans living in poverty – up 8 million from eight years ago and one in six American men ages 18 to 34 are either in prison or living in Mommy and Daddy's basement because they don't have a job.
And by the time he leaves office, President Obama will have accumulated more debt than all 43 presidents before him combined.
There are very clear reasons why President Obama failed. One of the biggest is that he insisted on using big government statism to create jobs, a strategy that has never worked.
Remember his failed stimulus plan that was going to create "shovel-ready jobs?" When those jobs never materialized and cost American taxpayers nearly a trillion dollars, he joked in retrospect that the jobs “weren’t so shovel ready after all.”
It failed because all those billions of dollars were filtered through that big, bloated government bureaucracy in Washington, and that is a lesson we need to learn. Doling out money through the political cronies to companies like failed solar panel maker Solyndra was destined to fail from day one.
These results have been pathetic, and all we have to show for it is a doubling of the national debt at the expense of our own kids.
Obama's plan didn't work. So the question we've got to ask before Donald Trump becomes president is, what will work? How do we create success for the forgotten men and women who turned out for Trump?
Trump's plan is in stark contrast to President Obama's. He's going to take the opposite approach. He will implement policies that historically have worked.
He intends to create jobs with lower taxes and other reforms including a reduction from seven tax brackets to three, a 15 percent corporate tax rate and a 10 percent repatriation rate for the trillions of dollars that multi-national corporations have parked abroad in banks. He's going to cut government regulation “big league.” He plans to renegotiate trade deals, achieve energy independence and repeal and replace ObamaCare. That should add up like a tax cut for most Americans.
Trump has set a goal of four percent GDP growth. Obama did not have one year of three percent GDP growth, making him the first president ever to bear such a dubious distinction.
If President-elect Trump follows through on that agenda, it could create one of the biggest economic booms the country has ever seen. I would be similar to what Presidents John F. Kennedy and Ronald Reagan did. They understood that, in order to have real economic growth, you need to unleash the potential of the free market.
Kennedy set in motion a plan to cut the top marginal tax rate from 91 percent to 77 percent. During his short time as president, 3.8 million jobs were created while seeing an average of 4.4 percent GDP growth.
Ronald Reagan inherited Jimmy Carter’s dismal economy and took Kennedy’s concept even further. He shredded the top marginal rate, lowering it over the course of his presidency from 70 percent to 28 percent. As a result, the Reagan economy created 20 million new jobs after the '82 recession ended. GDP growth averaged 3.5 percent and government revenues nearly doubled. We saw at the end of his presidency the longest period of peacetime economic growth.
President-elect Trump has one major advantage over JFK and Ronald Reagan. We now know that we can become energy independent. We have massive natural gas, shale oil reserves, and not only will tapping into those resources create millions of jobs here at home, but it will also create a whole new foreign policy dynamic in the Middle East. We won't be dependent on countries that hate our guts.
And if we export some of those resources to Western Europe, they won't be dependent on Russia for their energy needs.
There is one aspect of the president-elect's agenda that I worry about. He is talking about spending $1 trillion on infrastructure. Everybody agrees we've got to fix our crumbling roads and bridges, but how are we going to pay for it?
The money cannot be spent by congressmen and senators, 535 greedy bureaucrats in Washington who will only divert money to failed projects and corrupt cronies.
There has to be an outside commission put in place to oversee how this $1 trillion is spent. Stimulus spending under President Trump must truly result in shovel ready jobs.
Adapted from Sean Hannity's monologue on "Hannity," airing Dec. 14, 2016