The president tends to get too much credit for a good economy and too much blame for a bad economy. The Federal Reserve and Congress play a major role in the economy. It is unfortunate that the federal government has this kind of impact at all, but that is the reality.
Still, there are ways that the president could help improve the economy, as long as the deep state allows it to some degree. Obviously, it would be impossible for a president to improve the situation if he or she is assassinated or kicked out of office.
Regulations and Executive Orders
While the president shouldn’t be anything like a dictator, the fact is that we live in a regime where there are a lot of dictates coming from the executive branch. Most presidents issue hundreds of executive orders while in office, at least since the beginning of the 20th century.
Not all executive orders are similar in nature. Some are really inconsequential. Some may even be valid if it is a proper constitutional authority. You can also have some really awful ones.
Think about the Biden administration’s vaccine mandates. It immediately caused widespread chaos. Companies had to administer programs to check vaccine status and to review exemption requests, or they had to make the decision to not go forward with any of it and possibly face the wrath of the federal government. Meanwhile, there were millions of employees who had to fill out exemption requests or make the decision on whether to quit, be fired, or take a jab in the arm. Also, think about all of the lawyer and court costs associated with this.
Most executive orders are somewhere in between the inconsequential and the highly disruptive. But many of them add unnecessary red tape and make the American people less free and the economy less free. They add up to a major burden over time.
Since executive orders by nature are issued without congressional approval, they can be repealed without congressional approval. A president could repeal all consequential executive orders that interfere with the free market.
Even more important, the president has much control over all of the alphabet agencies of the administrative state. While it might take Congress to defund the agencies, the president can appoint people and make directives to the point where the administrative agencies are not causing major damage. The EPA and the FDA (as just two examples) aren’t highly destructive because of their budgets. They are highly destructive because of the interference in the market economy from all of the regulations and dictates.
Taxes and Spending
While Congress ultimately controls the purse, the president can have a big impact. The president can propose budgets. The president can veto funding bills, which would then force a supermajority congressional override.
The president can also put out tax proposals. Any simplifications or reductions can ease the burden on people.
Still, a massive reduction in spending is the key here. The federal government is spending over $6 trillion per year, which is money and resources coming out of the market economy. Some of it is simply redistributed, but it all has an impact. Even if the money isn’t spent on imposing more burdens on us, the actual spending is a misallocation of resources no matter what.
Imagine if the federal budget were cut in half and we had over $3 trillion at our disposal for the market economy. Even if you didn’t cut any taxes, we wouldn’t have the government spending those resources. With drastic cuts in spending, tax cuts and tax eliminations would be sure to follow.
The Federal Reserve
While the president can’t directly control the Fed, there is no question that the president can have influence here. We hear about “Fed independence”, but the Fed is a creation of the government.
The president gets to appoint the seven members of the Board of Governors of the Federal Reserve. This includes the appointment of the Fed chair. While they have to be confirmed by the Senate, there is no stopping the president from continuing to appoint members who will reduce the power of the Fed.
If the president is able to drastically reduce spending as discussed above, and the deficit mostly goes away, this also reduces the need for the Fed to create new money out of thin air and to manipulate interest rates downward. Without a deficit, there is no need for the Fed to purchase any new government debt.
The Bully Pulpit
We should not underestimate the influence that a president can command. If someone is elected president, there must be some kind of consent given by at least a substantial portion of the population. If a president were elected on the basis of drastically reducing government spending and regulations, then the president would have something of a mandate.
Reagan used his bully pulpit in the 1980s to push through marginal income tax cuts. The Democrats in Congress were overwhelmed with calls from constituents telling them to go along with the president’s tax cut plans. They were essentially forced to support the tax cuts or else face the wrath of their constituents, particularly at the next election.
Even if Congress won’t go along, the president can make a speech to the American people laying out a plan to drastically reduce government spending and regulations. If the president makes a good case, then it will mold public opinion.
Ultimately, to get less government interference and a better economy, we need public opinion on our side. A president is someone who can explain to the American people that their lives would be much better off if we had a massive reduction in government.
Conclusion
This is fantasy land, at least right now. Presidential candidates from the major parties are not laying out any plans for real government reductions. Most politicians, with very few exceptions, are not willing to give drastic and specific spending cut proposals.
Still, it is important to know that while the president doesn’t have as major of an impact as what people think, the president could take many steps to help free up the market economy from the government.