Renowned economist Art Laffer believes the U.S. economy is on solid footing, but he argues that unlocking domestic energy, fixing healthcare pricing, and increasing housing supply are critical to sustaining long-term growth.
Energy as the Backbone of Economic Growth
Laffer emphasized that while “energy dominance” may be a debatable phrase, freeing up American energy production is absolutely essential. Lower energy prices, he argued, ripple through the entire economy—reducing costs for consumers, businesses, and manufacturers alike.
Drawing a historical comparison, Laffer pointed to the early 1980s, when Ronald Reagan deregulated oil prices. That move led to a dramatic decline in energy costs—by as much as 50–60% in real terms—which helped fuel the economic expansion of the Reagan era. Laffer expects a similar effect if pro-energy policies are pursued again under Donald Trump.
Beyond domestic benefits, Laffer noted that lower oil prices could also have geopolitical consequences, putting pressure on energy-dependent nations like Russia. However, his main focus remains on ensuring affordable and abundant energy at home, particularly as the U.S. pushes forward with advanced technologies and data-driven industries.
A “Goldilocks” Economy—with One Major Caveat
Asked about claims from Axios that the U.S. is currently experiencing a “Goldilocks economy”—not too hot, not too cold—Laffer largely agreed. He said there are few areas of immediate concern in the broader economy.
That said, he highlighted one major long-term issue: healthcare price transparency.
According to Laffer, the lack of clear pricing in healthcare has distorted the market, driven costs higher, and failed patients. He argued that privacy laws are often misused to hide prices, preventing consumers from making informed decisions. If true price transparency were implemented, Laffer believes the U.S. could increase life expectancy by three to four years while cutting healthcare costs by up to one trillion dollars over time.
“This is a huge deal,” he stressed, calling healthcare transparency one of the most important reforms any administration could deliver.
Turning to the housing market, Laffer acknowledged growing concerns—especially among younger Americans trying to buy their first homes. However, he rejected the idea that interest rates are the primary issue.
Instead, he blamed high property taxes and restrictive local regulations that limit new home construction. Housing affordability, he argued, comes down to one simple factor: supply.
“If you build more houses, more people can afford to live in them,” Laffer said. Artificial constraints on building—such as zoning laws and excessive taxes—reduce supply and push prices higher. Addressing these barriers could dramatically increase housing availability and restore affordability.
The Bigger Picture
Laffer’s message was ultimately optimistic. He sees an economy with strong fundamentals and enormous potential, provided policymakers focus on supply-side solutions. From energy and healthcare to housing, his prescription is consistent: remove barriers, encourage competition, and let markets work.
If those steps are taken, Laffer believes the U.S. can achieve stronger growth, lower costs, and a higher standard of living for years to come.