Celebrating Tax Cuts
It is amazing what is floatiing around the internets. I find it very saddening to be reminded that I doubted the idea of the claim that tax cuts were supposed to pay Gov'ts bills but kept politely silent in the face of what seemed to me to be nonsense. I gain no solace in the excuse that I was spending 12 hour days fixing cars at the time and had passed on college. In this article no mention is made of the contribution from rolling over debt at lower and lower interest rates, even as that game was ending at 1% at the time of the writing and policys of actually giving tax money away was begun. The claim that Reagans tax cuts contributed to the growth of private industry outpacing the growth of Government is also fascinating in light of the recognition by both the left and the right that private industry holds sway over Government policy and Governments inability to do the jobs we have assigned it (SEC, EPA, FDA etc).
As I listen to sales pitches then and now, that tax cuts and small Gov't are the best solution to economic ills, I am reminded painfully of that definition of insanity about expecting different results from the same actions. Please read the full speech, the snippets I selected do not do it justice.
The following is adapted from a speech delivered (by George Gilder) on May 24, 2004, at a Hillsdale College National Leadership Seminar in Seattle, Washington.
For Gilder's full speech please use the link. It is followed by a speech given by Ronald Reagan in 1977.
America, responsible for one fifth of global GDP in 1980, produced one third of global GDP in 2003. That is Ronald Reagan's legacy...
...The 1970s ended with a budget (minus Social Security) that was nearly balanced and a balance of payments surplus. When Reagan assumed office in 1981, the government was apparently in the black. But most of the private sector was in the red, with bankrupt Savings and Loans and interest rates over 15 percent...
...Today is a heyday for entrepreneurs. As Reagan's policies have taken hold, the proportion of new jobs created through self-employment and proprietorships has risen from five percent in the 1980s to nine percent in the 1990s, and to 31 percent today. President Bush's low tax rates on capital gains and dividends have unleashed a new surge of entrepreneurship.