Biden's Clock is Running Out | This Week's Economy Ep. 94
Texas starts new legislative session, employment trends, and the future of the Federal Reserve.
Hello Friends!
As President Biden’s term ends, we see a flurry of last-minute legislation. Meanwhile, President-elect Trump is gearing up for his inauguration next week, setting the stage for a new chapter in national politics. The policy landscape is heating up at the state level as legislative sessions get underway. In Texas, the 89th Legislative Session kicks off tomorrow, and I’ll be closely monitoring key bills.
In this week's episode, I discuss these topics and more. You can watch it on YouTube below, listen to it on Apple Podcast or Spotify, or visit my website for more information.
TEXAS LEGISLATIVE SEASON STARTS
In the News:
Tomorrow marks the start of the 89th Texas Legislative Session, with many critical bills up for debate, including school choice legislation. Sources: News 4 San Antonio and KWTX
Dr. Ginn’s Take:
Pass School Choice for Students: Texas has an opportunity to lead the nation in student-focused education reform. Universal school choice, implemented through Education Savings Accounts, would empower families, improve academic outcomes, save taxpayers billions, and ease the burden of property taxes.
Reduce Spending and Taxes: Texas must prioritize budget and tax reform to reclaim its position as a leader in economic freedom and secure long-term prosperity. Adopting the Frozen Texas Budget would cap state and local spending growth at zero without taxpayer approval. Using surplus tax revenues to phase out school district M&O property taxes by lowering tax rates would rightfully put property taxes on a path to elimination.
Reform Licensing: Simplifying and eliminating unnecessary occupational licensing would create a more dynamic workforce, opening doors to better job opportunities for workers and entrepreneurs.
Event:
Today at 11 AM, join Texas Policy Research and me (I’m a board member) online to discuss this session's major policy debates. Hope to see you there!
TRUMP ADVOCATES FOR BIG BILL
In the News:
President-elect Trump is urging Congress to swiftly pass his policy agenda, which includes tax cuts, border security, and reliable energy. One notable proposal is to exempt tip earnings from taxation, with the reduction in revenue from extending the Trump tax cuts and others by imposing tariffs. Sources: Reuters and X
My Take:
Tax Reform: Lowering the tax burden on hardworking Americans is a commendable goal, but reforms should apply broadly to ensure greater impact. A better approach would be to make the individual income tax cuts from the 2017 Tax Cuts and Jobs Act permanent, further reduce the corporate tax rate, and make full expensing permanent.
Tariffs are a Costly Mistake: Imposing tariffs to offset revenue is a misstep that harms Americans. Tariffs act as hidden taxes, distorting markets, reducing competition, and raising consumer prices—undermining economic growth.
Better Policy Reform: True tax reform requires addressing the root issues: reducing excessive government spending, implementing pro-growth deregulation, and simplifying the tax code with a flatter, lower rate structure, not exempting taxes on tips and other narrow efforts.
Related:
LAST-MINUTE BIDEN POLICY PUSHES
In the News:
In the final days of President Biden’s administration, a flurry of policies are being enacted. Among the last-minute changes are a permanent ban on offshore oil and gas drilling along the Atlantic and Pacific coasts, as well as increased Social Security benefits for public workers. Sources: USA Today and CNBC
My Take:
Energy Regulations: The U.S. relies on abundant energy for growth and security. President Biden's executive action, enacting this last-minute offshore drilling ban, is undermining the nation’s energy independence. We genuinely need market-driven energy policies that empower Americans and drive long-term prosperity.
Social Security Reform: President Biden signed the Social Security Fairness Act into law, which the Congressional Budget Office estimated to cost taxpayers at least $200 billion over the next decade. While this benefits some government workers, it adds more strain to a Social Security fund already facing insolvency, as I recently discussed with NTD news.
Biden’s Policy Legacy: As with many outgoing presidents, Biden’s final flurry of policies aims to cement his legacy. However, his administration will likely be remembered for "Bidenomics," which left Americans grappling with inflated prices and high taxes. The incoming Trump administration and new Congress must address these challenges by curbing government spending and delivering meaningful tax relief for all Americans.
Related:
FEDERAL RESERVE’S FUTURE
In the News:
With the Federal Reserve’s Vice Chair for Supervision stepping down, President-elect Donald Trump can appoint an entirely new slate of bank regulators. This development raises critical questions about the future of the central bank. Source: Reuters
My Take:
Future of the Fed: With President-elect Trump in a position to reshape the Federal Reserve, the question arises: What should be done? The answer is clear: End the Fed. The Fed’s unchecked power distorts markets, hampers free-market principles, and undermines individual freedoms. A central banking monopoly serves special interests rather than Americans. Trump’s stance on the Fed opens the door for bold reforms that could finally address these systemic issues.
New Fed Chair Needed: As Jerome Powell’s term concludes in May 2026, President Trump can appoint a new Fed Chair committed to controlling inflation and unwinding the Fed’s bloated $7 trillion balance sheet. The next leader must prioritize fiscal discipline, sound monetary policy, and a strong dollar—key pillars for long-term economic stability.
Priority for Fed Leaders: The Federal Reserve’s primary responsibility should be maintaining price stability. Cutting interest rates to fuel short-term economic gains only exacerbates inflation and erodes the purchasing power of American families. The Fed must resist political pressures and focus on long-term solutions that protect the dollar's value and safeguard economic freedom.
Related:
PROPERTY TAX REFORM
In the News:
Many states, such as Texas and North Dakota, are considering property tax reforms in this new legislative cycle. Sources: Slate and Bismark Tribune
My Take:
Burden on Homeownership: Property taxes impose a recurring financial burden on homeowners, functioning like an annual wealth tax that increases based on local government assessments and rates. Even after a mortgage is paid, property taxes make homeowners permanent “renters” of their property. This tax is particularly burdensome for retirees, fixed-income earners, and families struggling to keep pace with rising housing costs.
Reform Strategy: States considering property tax reforms must craft a strategic plan that includes spending controls and sustainable revenue sources. By securing a solid fiscal foundation, states can pursue bold tax reform to strengthen their economies while avoiding potential financial instability.
Time to Eliminate Property Taxes: American homeowners deserve actual property ownership, economic opportunity, and a government that operates within its means. States should take the opportunity this legislative cycle to reform property taxes.
Related:
AMERICAN JOBS OUTLOOK
In the News:
New data from the Bureau of Labor Statistics shows that the U.S. national quit rate remained steady at 2.1% in 2024. This trend has been dubbed the "Great Stay," contrasting with the "Great Resignation" of 2021-2022. However, this stability may shift in 2025 as rising costs of living push workers to seek better opportunities and more flexibility. Another major factor shaping the labor market is the rise of artificial intelligence (AI), which drives demand for technical roles, especially in AI-related fields. Sources: Newsweek, BLS, and Axios
My Take:
Current Job Market: The “Great Stay” reflects a challenging economic climate where workers hesitate to take risks and switch jobs. This stagnation is a symptom of policies that stifle growth and discourage innovation. To revitalize the labor market, we need policies that reduce burdensome regulations, cut taxes, and create a thriving business environment. By enabling businesses to expand, workers will have more opportunities to find jobs that suit their skills and aspirations.
AI Impacts on Jobs The rise of AI represents a tremendous opportunity for economic growth and innovation. History shows that technological advancements lead to new industries and jobs — many of which we couldn’t have imagined before. AI is already creating roles that didn’t exist a decade ago, and this dynamic job creation benefits American workers. Policymakers should embrace this evolution rather than fear it.
Embracing Innovation: Protectionist policies and regulatory overreach would hinder the growth potential of new technologies like AI. Instead, we must focus on fostering an environment where innovation thrives. Flexible work arrangements, emerging industries, and greater productivity will drive prosperity if we adopt policies that protect free markets and encourage innovation. We can ensure a more dynamic and prosperous future for all Americans by embracing these changes.
Related:
Thanks for joining me in this episode of "This Week's Economy." For more insights, visit vanceginn.com and get even greater value with a paid subscription to my Substack newsletter at vanceginn.substack.com.
God bless you, and let people prosper!
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