President Barack Obama’s critics have a point when they say
that Mr. Obama is having some difficulty defending the practical consequences
of his policies. An unemployment rate of 7.8 percent four years after Mr. Obama
said his progressive policies would result in an unemployment rate of 5.6
percent is certainly an economic bummer.
We are very far from normalcy. To date, Mr. Obama has
shucked off the non-performing economy on former President George Bush, but the
dodge of responsibility for an economy in cardiac arrest is beginning to annoy
the unemployed.
Such laggard numbers suggests the opposite of progress and
gives weight to the charge made by Mr. Obama’s critics that, at least in
economic matters, the president for his entire term has been marching to the
wrong drummer.
The right course, Republican Vice President Nominee Paul
Ryan attempted to suggest in his first and only debate with Vice President Joe
Biden, was outlined by President John Kennedy in a 1963 speech to the Economic
Club of New York.
This name dropping brought forth a snarl from Mr. Biden: “Oh,
so now you’re John Kennedy.”
Mr. Ryan withstood this eruption by flashing an indulgent
smile. But he might easily have retorted, “No, I’m no John Kennedy. But John
Kennedy was John Kennedy, and this is what he said:
“There are a number of ways by which the federal government
can meet its responsibilities to aid economic growth… the most direct and
significant kind of federal action aiding economic growth is to make possible
an increase in private consumption and investment demand -- to cut the fetters which
hold back private spending. In the past, this could be done in part by the
increased use of credit and monetary tools, but our balance of payments today
places limits on our use of those tools for expansion. It could also be done by
increasing federal expenditures more rapidly than necessary, but such a course
would soon demoralize both the government and our economy. If government is to
retain the confidence of the people, it must not spend more than can be
justified on grounds of national need or spent with maximum efficiency.
“The final and best means of strengthening demands among
consumers and business is to reduce the burden on private income and the
deterrents to private initiative which are imposed by our present tax system –
and this administration pledged itself last summer to an across-the-board,
top-to-bottom cut in personal and corporate income taxes to be enacted and
become effective in 1963…
“Our true choice is not between tax reduction, on the one
hand, and the avoidance of large federal deficits on the other. It is
increasingly clear that no matter what party is in power, so long as our
national security needs keep rising, an economy hampered by restrictive tax
rates will never produce enough revenues to balance our budget – just as it will
never produce enough jobs or enough profits…
“In short, it is a paradoxical truth that tax rates are too
high today and tax revenues are too low; and the soundest way to raise the
revenues in the long run is to cut rates now… he purpose of cutting taxes now
is not to incur a budget deficit, but to achieve the more prosperous, expanding
economy which can bring a budget surplus.”
Following Mr. Kennedy’s tax cuts, enacted after the
president’s death in the Johnson administration, unemployment was reduced from
5.2% in 1964 to 4.5% in 1965 and further fell to 3.8% in 1966. Though it had been estimated that the cuts
would result in a loss of revenue, tax revenue increased in 1964 and 1965.
Kennedy’s profession of faith in the private economy, his
clear recognition of the limits of government in effecting economic growth and
his frank espousal of ideas now associated with the Chicago school of economics
makes him an articulate opponent of the antique notions, disastrous in their
consequences, presently being peddled by Mr. Biden and Mr. Obama, according to
which tax dollars plucked from job producers during a recession and sent to
Washington, there to be redistributed to select industries, leads to increased economic activity. If you
blow the dust from the Obama-Biden methodology, you arrive at the 1912
election, the high tide of the progressive era.
Package it as you will, the Obama campaign book is nothing
new under the sun. And Mr. Biden, who
harks back in his oratory to the days of Eugene Debs, is piled high with loads
of discredited dust.
Mr. Obama, it should be clear to everyone, is no Jack
Kennedy, and it is no wonder that the mere mention of Mr. Kennedy’s name by a
politician who embraces the thrust of his central idea – tax cuts spur economic
growth and increase government revenues -- provoked a dog’s snarl from Mr.
Biden.
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