Killing encryption ALONE would kill the the internet. You suspect illegal activity, go to a judge and get a warrant. That's the way it works if you suspect someone is hiding illicit goods in their garage, that's the way it should work online. Frankly, the Black Hats are probably drooling at this proposal. It would make things so much easier for them.
This is going to **** over your economy hard; partially because no company EVER would keep their deepest, darkest secrets without encryption, and no sane COUNTRY would want to do business with the US or its government without some promise of protecting their data.
A bill requiring social media companies, encrypted communications providers and other online services to report drug activity on their platforms to the U.S. Drug Enforcement Administration (DEA) has advanced to the Senate floor.
And economy: as people will move not only their infrastructure, but take necessary steps to insure their data doesn't pass through an american run server at all. Much in the same way people are already doing for china.