Last week, the Biden administration released the “Economic Report of the President.” The report catalogues a hodgepodge of ideas with the “core aim” to “restore the public sector as a partner in long-run growth.” Clearly, President Biden wants to increase the role of Washington in every part of the American economy.

He also hopes to fuse divisions within the Democratic Party. Toward this end, the report attempts to unite technocrats with a growing group on the left who have the view that economic policy exists to reward their political coalition, as well as those they view favorably, and to penalize all others.

This is a systematic shift in economic policymaking—one that should concern voters across the ideological spectrum. It’s time to get back to what made the U.S. the leader of the free world.

The goals of economic policy have evolved over the country’s history. For the first century and a half, the federal government’s main economic policy goal was to balance the budget. From 1789 to 1932, the federal budget was almost always balanced or in surplus, except during a major war or recession. This was done out of necessity to support the government’s ability to secure credit and manage debt payments.

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Meanwhile, government debt was seen as something that facilitated public corruption by empowering the powerful and enriching their political coalitions. As economic historians John Joseph Wallis and Naomi Lamoreaux have pointed out, it was the discovery of a corrupt scheme to finance infrastructure projects through government debt that spurred many states to impose constitutional restrictions on their debt. Debt retirement was also used to signal freedom from foreign influence and the country’s viability. 

In the aftermath of the Great Depression, at the peak of Keynesian influence, the government’s goal shifted to managing the economy over the business cycle with an eye on long-run productivity. The main objectives of economic policy became ensuring price stability and low unemployment, while maximizing economic growth. Each of these goals was supported by moral justifications. High inflation erodes the virtues of prudence and penalizes work. High unemployment undermines health and wellbeing. Slow economic growth fosters resentment, reduces tolerance, harms standards of living and can erode support for democratic institutions. 

Politicians and economists had different views about how to achieve these goals, and some approaches have proven more successful than others over the past 80 years. Ultimately, though, the success of any of these policies in achieving price stability, low unemployment and economic growth is empirically verifiable. In essence, it is possible to determine whether the policy worked. This is because the goals themselves were quantifiable and observed easily by the public.

Today, however, both the Democratic and Republican parties are moving to support more extreme perspectives without attachment to such centrist goals. More and more politicians on both the left and the right now view economic policy as a tool for penalizing activities they don’t agree with and rewarding those they favor. This change is reflected throughout the administration with an increased politicization of agencies such as the Federal Trade Commission and the onslaught of “environmental, social, and governance” rules proliferating across government.

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This shift is unsustainable and has costly implications. Policymakers must address the reality that economic growth is not guaranteed and that U.S. debt may not always remain attractive to investors. They must address the fact that, even though the economy has improved, many young adults have not returned to work or school. And they must take steps to address corruption and cronyism at every level of government to safeguard trust in public institutions.

Using history as a guide to determine what economic policy goals are, in fact, sustainable, the short list would include the following. First, economic policy would do what it takes to make sure that U.S. debt remains a sound investment. Second, economic policy should focus on improving incentives that increase productivity without penalizing work. Third, economic policy should not be used to consolidate power and enrich the politically well-connected. Those goals are as broadly acceptable today as at any point in U.S. history.