The American regulatory regime is broken. Decades of poor planning have witnessed the uncontrollable metastasis of thousands upon thousands of restrictive and ineffective regulations. These outdated rules cost the economy trillions of dollars every year. The causes are systemic. Administrators create rules with limited public input, and are therefore blind to the true consequences of their decisions. Overwhelmed by the sheer size of the paper trail, legislators lack the time or ability to fight an avalanche of rules. Meanwhile, special interests have had an unfair advantage in pushing favorable policies because key elements of the regulatory process are opaque to the public. Missing data and siloed policy knowledge have created a rocky regulatory landscape for public and private sector stakeholders. Regulatory solutions must begin with transparency and measurement, as enabled by advances in information technology.
America spends over $3.2 trillion on healthcare per year and 26% of federal government spending. Healthcare spending accounts for 18% of GDP, or roughly 1 in 5 dollars spent in America, and experts estimate that up to 1/3rd of expenditures are waste. Consequently, US healthcare spending is twice the OECD average, with no end in sight. As Larry and Sergey pointed out in a recent interview, “Health is just so heavily regulated, it’s just a painful business to be in…The regulatory burden in the US is so high that it dissuades a lot of entrepreneurs.” Streamlining regulation in the healthcare sector to allow sharing and analysis of medical data is vital to ensuring that our society can sustainably provide affordable, quality care for all Americans in the decades to come.
America faces a mounting transportation crisis. The primary culprit is road congestion. Americans spend 7 billion hours a year sitting in traffic, crippling both our individual health and national economic productivity. Commuting costs keep many Americans locked out from urban hubs, which are centers of innovation and economic opportunity. Worse, infrastructure financing has dried up: American roads are falling apart, with an $836 billion backlog of capital needs, but the Highway Trust Fund is insolvent. Our country must massively expand construction of new lane-miles and alternative infrastructure such as tunnels and high-speed railways in order to follow the road to prosperity.
Education reform is the best solution to the challenges of short-term technological unemployment and the skills gap in the American labor force. In the coming decades, many conventional forms of work will be automated. Fortunately, there are currently 5.5 million unfilled jobs and counting in the US labor market, and new jobs are emerging in such sectors as the science, technology, healthcare, and service industries. We believe that a combination of high school apprenticeships and a carefully managed for-profit higher education system will allow Americans to develop the skills necessary to pursue their vocations, jumpstarting growth and innovation in every community.
The lack of affordable housing in America’s high-growth cities is crippling growth, exacerbating regional inequality in the form of racial, income, and age-based segregation, and destroying equality of opportunity in American society. A recent study estimated that lowering regulatory constraints in the most productive American cities to the level of the median American city would increase U.S. GDP by 9.5%, generating over $32 trillion over the course of the next decade. The culprit for America’s undersupply of housing is “Not In My Back Yard” or “NIMBY” syndrome, as manifested in restrictive land use regulations. While regulatory reform must remain at the heart of any housing strategy, shifting cultural attitudes is a critical element as well.
The United States has the highest incarceration rate of any developed country, housing 2.3 million inmates, or nearly a quarter of the world’s prison population. Of this population, 14% are serving life or virtual life (50+ year) sentences. Overzealous prosecutors and strict minimum sentencing laws are undoubtedly major reasons why so many Americans are behind bars, and common-sense statutory reform is necessary. But perhaps even more shocking is the fact that 80% of American criminals re-offend once released from prison. Any adequate solution to America’s prison catastrophe must place rehabilitation at the heart of the incentives structure for both public and private prisons. We are excited by work in the non-profit sector to teach prisoners entrepreneurship skills and reintegrate them into their communities, as well as the prospect of creating market incentives for private prisons to reduce recidivism rates rather than “warehouse” prisoners. A legal framework which encourages bright, entrepreneurial members of society to iterate on the best ideas for helping ex-convicts lead rewarding and successful lives is key to real prison reform.