Desperately Needed: Kemp-ian Growth Policies

By Larry Kudlow | 10/28/09 | 09:25 AM EDT | 5 Comments

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It must be something in the water. The ruling Democrats know their tax-hiking, re-regulating, and big-spending policies have failed to rejuvenate job-creation or reduce the unemployment rate. And yet they persist in trying more of the same.

A recent New York Times editorial acknowledges that the economy is weak, but it pleads for yet another federal stimulus package. The Times editors want another round of unemployment benefits (this would be the third) to subsidize non-work welfarism. They also want more federal spending on state Medicaid -- an area that already has been showered with federal taxpayer money to no economic avail since it has nothing to do with economic growth.

Can’t we do better?

Or let’s take the case of Rep. Barney Frank, a smart guy. He told MSNBC that "The right wing took control of government and ruined it. They gave it a bad reputation. Now we are trying on every front to increase the role of government in the regulatory area."

Ah! Re-regulation. What a great idea. As I recall, the Soviet Union and old Eastern Bloc tried heavy government control and regulation, and it didn’t work. The people rebelled. They wanted economic freedom; the right to keep their own money; the right to start their own businesses; and the right to climb the ladder of success in a free economy.

Now here’s a counter-thought. The Reagan free-market revolution, which included regulation lite, a sound dollar, and low tax rates, launched a three-decade-long boom. And yes, the Gipper’s policies were copied around the world. (What does Barney Frank know that the rest of the world doesn’t?) Even the communists in China have adopted deregulated free market capitalism.

The battle between democratic entrepreneurial capitalism and heavy-handed statism has already been won by the economic freedom fighters around the globe. That’s one reason why the capitalist emerging economies in Asia, Eastern Europe, and many parts of Latin America (think Brazil) are challenging U.S. economic supremacy and the American dollar.

Prodded by the New York Times and other media organs, the Democrats in Congress are going in the wrong direction. They don’t seem to realize that growth and wealth come from individuals and human action, not the heavy footprint of the state.

Here’s another example of drinking from the wrong water.

Top administration economist Christina Romer delivered a very gloomy forecast to Congress last week. She said unemployment will remain at a "severely elevated level," and that the U.S. jobs market will stay painfully weak next year. She was just being honest.

Ms. Romer, who has written about the benefits of permanent tax cuts to stimulate GDP growth, might in fact be sending a shot across the bow to her fellow Obamacons. She even said the Obama stimulus plan will contribute little to economic growth in 2010.

From her own work, she knows that big-government spending and temporary tax credits have no economic-growth power.

So why not try something different?

Unfashionable as it may be today, why not go back to the supply-side model of lower marginal tax rates for individuals and businesses, large and small? That’s the model my late dear friend Jack Kemp successfully espoused to President Reagan more than 30 year ago.

It’s the incentive model of economic growth. At lower tax rates, where folks keep more of what they earn and invest, greater after-tax rewards spur greater work effort and investment risk. They also boost asset values. This is exactly what the economy needs: a rejuvenated dose of incentives -- permanent incentives.

Think of this: At the same wage level from cost-conscious businesses, a 10 percent personal tax cut provides a handsome after-tax wage-increase incentive that will spur individuals to go back to work -- simply because work will pay more after-tax.

When I spoke last week at the launch of the Jack Kemp Foundation in Washington, D.C., I emphasized the supply-side model of a sound dollar, flat tax rates, free trade, limited government, and market-driven solutions for better schooling, more efficient health care, and the amelioration of poverty. Jack Kemp believed in these principles.

He believed in growing the economic pie, not redistributing it. And he believed in growing it large. He would have hated today’s notion of a "new normal" of 2 percent growth and high unemployment. He would have argued for the need to give everyone greater economic-empowerment opportunities and incentives. And he would be just as right today as he was when he began his crusade in the mid-1970s.

Kemp’s universal principles have stood the test of time. His was a genuine growth solution, one that is essential to America’s greatness, her boundless optimism, her prosperity, and her success. Today’s anti-growth economic policies would have driven him crazy. And he would have fought back.

That’s the message for economic freedom fighters everywhere: Unite, and throw off your chains. Especially here in America.

 

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Comments

 
Big Brother in on Track!

A group of us believe that the Democratic Obama Left fully intended to ignore unemployment all along! They want to implement as much of the control of the people by the government as possible, even with seed legislation. That includes rationing of healthcare, energy and much higher taxes to slow down and bring the US economy to a halt. As soon as the EPA bought into the Global Warming fraud, environmental groups all over the US lined up to file suit against anyone who wants to build an electrical generation facility, for example.

Smart Grid Technology will effectively give government the power to turn on and off your home or business electricity, while at the same time forbidding any new energy sources to SAVE THE PLANET.

You folks out there who don’t understand all of this should start learning fast…your freedom is at stake and this is no joke! Start here!

Submitted by Bob Clark on Wed, 10/28/09 - 12:00 PM » | Print
 
 
How do we reach people?

Bob, Smart Grid like Smart Growth is all nonsense.  The problem now with all this nonsense hitting the American public at the same time, is that it stresses individuals out to the extent they put their head in the sand.

How do we reach people?  Americans right now are just trying to keep their heads above water, keep their homes, feed their children, keep their jobs, and look for jobs while trying not to have their bodies succumb to cancer and other stress-related illness due to all the stress and life situations that they cannot control.

I don't think the rest of the world truly understands the depth of our (U.S.) demise and its effect on the public here.  Our schools are now infiltrated with indoctrination and parents are having a hard time preventing it.  Now we will be told what to eat and what type of produce to buy because the choices will be made for us.   Even our health care will be chosen and our fate determined by that lack of quality control.

Any ideas how the hell to stop this?

Submitted by SHERMAN TANK on Wed, 10/28/09 - 05:42 PM » | Print
 
 
Jack Kemp's ideas

I knew Jack well. I just wish more people listened to him while he was alive.  I'm getting the impression from this present administration and the minions who support it, (using an overworked cliche) that they could care less and therefore throw the baby out with the bathwater.  The problem with that type of response to a complex issue is that they not only turn the clock back to the dark ages, they create another layer of problems that may take equally as long to uncover, let alone correct.

While Jack touted the "supply-side model of a sound dollar, flat tax rates, free trade, limited government, and market-driven solutions for better schooling, and more efficient health care" the culmination of these items and/or principles (as I understood it from him) would CULMINATE in the amelioration of poverty.  The so-called amelioration of poverty, while a laudible goal, was understood that it could not sustain itself without the other principles falling into place.

No question that Jack had the knowledge base and experience, however, he and I disagreed on the "flat tax" issue.  I look at the UK model -- it is an unmitigated disaster, just like their health care system.  (I am familiar with both having lived there and watched the peacemeal destruction of their infra system).  Britain's all too fragile system is tearing at the seams as it is overtaxed, literally and figuratively, and they do not have the funding to rectify their prior bad decisions.

The U.S. *was* ie, "used to be" on sound footing, meaning our growth was fairly predictable as was our economic stability; however, right now, in my view, the emphasis for Republicans and Independents is more immediate.  That emphasis must be getting back control of an "out of control" runaway Congress who think it is their job to legislate our bedrooms and businesses. 

Presently, most everything is ancillary to the fact that our presidency has been hijacked and therefore requires our immediate attention and resolution.

Submitted by SHERMAN TANK on Wed, 10/28/09 - 04:52 PM » | Print
 
 
What I'm doing!

I have been writing about this global warming hoax, fraud, bunko scheme or whatever for a very long time.  This piece, was one of my first attacks on Associated Press.  Their Seattle Office is staffed with liars and idiots to be kind.  I frankly send e-mail challenges every time one of these clowns goes on about temperatures, CO2 or whatever.  They never respond.  I also do this to morons like Seth Borenstein who just published a bogus piece on temperatures.  It was laughable!  He must be a fool to think he can get away with this lying nonsense.

I hold public meetings as I did last night in Lake Stevens, WA as President of the Citizen's Alliance for Property Rights and we discussed the Sustainable Development Agenda 21 stuff. I think that getting to as many people as possible is important.  4 years ago I wrote a e-mail called "Bob's Primer on Global Warming" and sent it all over the west coast. It was then forwarded all over Europe by a Professor at Cambridge.

So there is a lot to do and we mean to do it.  I encourage anyone reading this to check out Red County as one of your primary sources of information on these very serious matters.

Submitted by Bob Clark on Wed, 10/28/09 - 06:22 PM » | Print
 
 
Agenda 21 is Dangerous

Agenda 21 is Dangerous and deserves bad press in that direction.  Why is it so quiet? Why no coverage?  The majority of the public have never heard about it.

Submitted by SHERMAN TANK on Wed, 10/28/09 - 06:52 PM » | Print
 

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