"The biggest global threat facing the U.S. is communist China. Fortunately, we have a weapon that Beijing lacks: economic freedom. If we tap into the spirit that's made America the most innovative country in human history, China doesn't stand a chance.
Yet today many of our policy makers are undermining our advantage by moving toward central planning and socialist control.
An example of America's dangerous slide is the Chips and Science Act, which directs $280 billion of taxpayer money to special interests. It's supposedly necessary to help the computer-chip industry compete with Chinese competitors, which are subsidized by Beijing. Another is the Inflation Reduction Act, which spends more than $430 billion and throws money at companies that politicians claim are essential to America's long-term success.
Behind both bills is the assumption that Washington can direct the economy to ensure America's dominance. We're even told that if the government calls the shots, communist China will have to call off its plans to supplant us. After President Biden signed the Chips Act into law, National Economic Council director Brian Deese boasted that "this will allow us to really shape the rules of where the most cutting-edge innovation happens."
That claim is as false as it is arrogant. When Washington gives subsidies with strings attached, it makes companies less competitive and innovative, not more. Businesses learn to follow Washington's demands instead of pursuing the innovation Americans deserve. They build factories where Washington wants, invest in technologies that Washington likes, and make decisions that Washington approves.
The same is true of the Inflation Reduction Act. Mr. Biden claims it will "give us the ability ... not only to compete with China for the future, but to lead the world and win the economic competition of the 21st century." How? By wasting billions upon billions of taxpayer dollars on windmills and solar farms? The act will dole out huge sums on electric-car subsidies while giving enormous handouts to labor unions. This has everything to do with politics and nothing to do with keeping America prosperous and strong. What's next, five-year plans? The entire Democratic Party and a growing number of Republicans accept the argument that Washington should be in the economic driver's seat -- especially to compete with communist China.
China itself proves that central planning is fatally flawed. Beijing is currently dealing with its weakest economic outlook since the 1970s, which is a direct result of the socialist control that America's leaders seem to want to mimic. The Chinese real-estate market is cratering, while the country's middle class faces a debt crisis from which it may not recover. The most innovative part of the Chinese economy -- its tech sector -- is being strangled by government. And Beijing's draconian Covid lockdowns cripple its economy while driving a generation of Chinese citizens to resent their own government.
American politicians risk a similar fate by embracing their own versions of central planning. The warning signs are already here, in the form of slowing growth, soaring debt and sliding optimism among our own citizens.
America knows how to prosper; we've done it better than any other country in history. Far from letting politicians control the economy from the top down, we've empowered citizens to create from the bottom up. We lead the world in science, technology, military strength and so much else not because Washington knows best, but because the American people have the freedom to constantly dream and do better.
The last thing our leaders should do is direct the economy, subsidize special interests and tie strings to entire industries. Instead, we should make it easier to start businesses, clear hurdles that stifle innovation, and let job creators and families keep and spend their own money. Economic freedom is the proven path to beat communist China. If Washington keeps trying to pick winners and losers, America will lose.
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Ms. Haley served as governor of South Carolina (2011-17) and U.S. ambassador to the United Nations (2017-19)." [1]
1. Central Planning Won't Beat China
Haley, Nikki.
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 16 Aug 2022: A.13.
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