If you haven’t completely surrendered to the Plame Game, you’ll know that the feds just lowered
their
deficit estimate
for this year by $94 billion to $333 billion. Why did this happen? There were several
one-time-only factors, but the big reason is that non-payroll deduction tax collections have soared this
year. In other words, businesses and individuals are racking up higher profits and capital gains and
the federal government is collecting its share.
We conservatives know why this is happening. In 2003 the Congress passed the President’s program to
lower income tax rates and sharply lower tax rates on dividends and capital gains. The economy
immediately kicked into high gear and it hasn’t looked back since, even with sharply higher
energy prices. This effect is called
supply-side economics and it works every time it is tried.
Let us give thanks where it is due, to President Bush for pushing through the tax cut plan in the
face of implacable opposition from the Democrats.
We cannot know what would have happened to the economy if Vice-President Al Gore had been elected
in November 2000, but we can guess. The policies he would have chosen would have looked a lot more
like the macroeconomic policies of Old Europe, France and Germany. That means a swollen public sector, high
tax rates, high unemployment and very little economic growth.
Thank you Mr. President for sparing us from all of that.
Back in November 2000 we could not know whether the market crash of 2000 was another 1929 or not. But
we know now that it didn’t end up that way. And the best way to evaluate why we didn’t have a Great Depression
is to look at the mistakes
the government made in the years after 1929 and didn’t make after 2000. It didn’t bail out lots of
insolvent businesses. It didn’t enact a National Recovery Act to keep wages and prices above the market.
It didn’t allow banks to collapse and shrink the money supply. It didn’t pass a swingeing Smoot Hawley
tariff increase although it did pass a foolish tariff on steel imports. And it didn’t raise income tax rates
like Presidents Hoover and Roosevelt did.
We cannot know what a President Gore would have done, but we can guess.
Like I said, thank you Mr. President.