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Posted on 05/28/2011 2:56:03 PM PDT by Son House
House Majority Leader Eric Cantor turned the policy temperature down on austerity this week by rolling out a strong economic-growth agenda. Headlined by a 25 percent top tax rate for individuals and business, the Cantor package includes regulatory relief, free trade, and patent protection for entrepreneurs. It’s job creation and the economy, stupid.
Sounds Reaganesque? Well, Eric Cantor has a lot of Reagan blood in him. Back in 1980, while Cantor was still in high school, his father was the Virginia state treasurer of the Ronald Reagan presidential campaign. So the apple never falls far from the tree.
In fact, it looks like Cantor is restoring the supply-side incentive model of economic growth. Forget tax-the-rich class warfare. Throw out wild-eyed government-spending stimulus and dollar-depreciating Fed money-pumping. Make it pay more after tax to work, produce, and invest. Go for a growth spurt, something the economy badly needs. And — my thought — crown such a growth strategy with a stable King Dollar re-linked to gold.
When I interviewed Cantor this week, he made it clear that faster economic growth was crucial to holding down spending, deficits, and debt. As scored by the CBO, every 1 percent of faster growth lowers the budget gap by nearly $3 trillion from lower spending and higher revenues. “Grow the economy,” Cantor said. “It will help us manage-down the deficit and it will help get people back to work.”
This is not to say that spending cuts and structural entitlement reforms aren’t necessary. They are. But it is to argue that lately the GOP has forgotten the growth component that is so essential to spending restraint and deficit reduction.
The GOP should say: In return for substantial federal-spending cuts, we’re gonna more than make it up to you with large tax cuts. You will win. Big government will lose.
I suggested to Cantor that the GOP adopt a 5 percent national growth target, which President John F. Kennedy had when he launched his across-the-board tax cuts in the early 1960s. “That is a fantastic goal,” he told me.
Cantor’s growth plan is very timely as the U.S. economy is once again sputtering. In what is already one of the weakest post-recession recoveries in the postwar era, first-quarter GDP came in at a tepid 1.8 percent. Many economists believe the second quarter will be no better.
And consider this: Between 1947 and 2000, average real economic growth registered 3.4 percent yearly — an excellent prosperity baseline. Yet over the past ten years — amidst boom-bust Fed policy, a collapsing dollar, and soaring gold — the stock market on balance hasn’t moved as the economy has averaged only 1.7 percent annually. Because of the ongoing slump, actual real GDP growth from the early 2000s through the first quarter of 2011 has dropped nearly 17 percent below the long-run historical trend. That translates to a massive output gap of $2.7 trillion.
In order to close that gap in five years the economy would have to grow 7.3 percent annually (roughly Reagan’s two-year recovery rate in 1983-84). To close the gap in ten years, the economy would have to grow near 5.3 percent annually.
Alright, so why not establish a national economic growth target of over 5 percent? That might wipe out the current spirit of economic pessimism and decline.
A 5 percent growth target might give some hope to the roughly 15 million unemployed. Or the 12 to 15 million homeowners who can’t meet their mortgages, are in foreclosure, or have upside-down property values. Or the disappointed investors who haven’t made any real cash in ten years. Or the families who are suffering from rising gas and food prices.
A 5 percent growth target might wipe out the sense that we can’t seem to right the economic ship.
For all these reasons, according to the polls, jobs and the economy are the number one political issue today. Entitlements are going to have to be fixed. But that day of reckoning is nearly 20 years away. Right now folks want work and income to pay the bills.
The brilliance of Mr. Cantor’s effort is his attempt to move the GOP back to the economic-growth high ground. It is our most urgent priority.
Rep. Cantor won an award from the Business Software Alliance in 2008, so the patents he wishes to strengthen might well include those on software — a very bad idea in my opinion.
Still, pro-growth is the way to go.
this is a triple repost. cantor is a rino and not to be trusted. look at all the savings from the 2011 budget that wasn’t
Kudlow please. Our legal system has become an elephant turd sitting on top of the economy. When you get 15 or more employees, you have to start file EEOC reports. And, by then, you’ve got employees trying to organize a union if you’re not in a right to work state. The list goes on and on for hours and hours - it’s a stinkin’ nightmare trying to do business here with all the political correctness, affirmative action, legal requirements, insurance requirements, lawsuits - it’s insane. State and municipal governments are blowing billions on special needs teachers, overtime to drive up fat pensions, driving property taxes through the roof, so no one wants to live in the cities or suburbs because you wind up with more cash out of pocket than you can possibly sell your house for. Our “liberals” have ruined America.
So Kudlow, tell me again how some tax breaks - as the Federal discretionary spending, like a sacred cow, is NEVER MENTIONED, and the DOE, FCC, HUD, etc., etc., etc., etc., will continue to expand at 5% to 15% per year - how some tax breaks are going to suddenly make America so attractive to do business in, when the Federal gov’t is borrowing 43cents of every dollar it spends and it’s plain as a turd in the pool that taxes will be forced to go higher much more dramatically down the road as the Federal DEBT (increasing at over $3,000 per year for every many woman and child in the country) goes up just about asymptotically. Oh, and hundreds of billions, or trillions in U.S. capital is being invested overseas to grow OTHER economies - by private funds that practically EVERYONE is now invested in through their other investments. Splain me Kudlow.
Thanks for clarifying on the repost, my search for ‘cantor’ didn’t pick that up
I hope the Republican party is reading your post too.
Patents help big business who acquire most patents, which lock out anyone without a lot of money from licensing the ideas for a reasonable price.
Basic math is not supposed to be patentable. Any thing “obvious” to a practictioner in the particular art is not supposed to be patentable.
THERE ARE FREAKING PATENTS FOR BUSINESS PROCESSES - AS IN, HOW TO PAY BILLS.
IT’S FREAKING GARBAGE - THE WHOLE PATENT SYSTEM SHOULD BE ELIMINATED, since all it does is make money for lawyers big companies who want to SLOW down innovation so they can milk every stupid thought the get for all it’s worth through the monopolistic patent.
Why not make it a flat 15% across the board for EVERYBODY living in this country? The economy would boom, businesses could actually do business and nobody would have to worry about the IRS coming after them for some off the wall mistake.
IT'S WAY PAST TIME TO ABOLISH THE IRS AND THE ENTIRE TAX CODE AND INCOME TAX!
ARE YOU LISTENING PRESIDENTIAL CANDIDATES? ARE YOU!!!!
A pro-growth agenda AND tax rate cuts AND dramatic reductions in federal spending AND tax reform AND entitlement reforms AND a sensible energy policy are components in a comprehensive strategy.
Ideally, a fiscal/constitutional conservative would run with this strategy as his/her platform and if elected, carry that mandate to implement as much as the American people would allow.
I can dream can’t I?
Sounds good except for the bit about “patent protection for entrepreneurs”. Eh? Another excuse for government-granted monopolies, no invention needed. I know we already have such rubbish: patented algorithms, patented business models, patented button placement in online application programs. But does our side have to encourage it? The last good patent law was the Statute on Monopolies of 1624.
I’m almost considering filing a patent claim on the next theorem I prove, not because I think I should be paid money by any other mathematician who cites it, but because patenting algorithms *is* patenting theorems, and is corrupt and should be shown to be corrupt by parody.
A “no more bank bailout” pledge is essential.
If (no, when) Greece defaults the European banks will come running to Uncle for another bailout.
We need to say “no” this time.
Cantor, is a Mr TARP, joke and a dirt bag.
Alas, there’s much truth in what you say. BTW, in saying pro-growth is the way to go, I did not mean to endorse any kind of patents — esp those on software, which I have read enough about to know are frequently nefarious.
During a declared war where the nation’s safety is at stake, as in during WWII, the government may have to have involvement in directing the actions of private sector businesses. Other than that, there is absolutely no basis in the Constitution for the Federal government to own any part of a private business, or show any preference between them in terms of lending to them or otherwise providing capital to them.
I agree, there should never, ever be another “bailout” of any kind, whether a fund, a union, a corporation or any entity.
Nope. I used to agree with that sentiment, but no longer. There is never any excuse for a government of free individuals to usurp their freedom. We'll defend our freedom together -- or we won't.
IMHO...
I was trying to refer to the changeover of automobile plants, etc., to wartime manufacturing during WWII.
I could understand at that point, with Japan and Hitler kicking butts and the U.S. standing there with it’s peacetime pants around it’s ankles, we had a changeover. Note, however, that I don’t think there were ANY cases where the U.S. government bought a company - they just ordered tanks, planes, etc., from them. I don’t think there were many cases of manufacturing companies not cooperating - everything I hear points to most of them WANTING to help.
We don’t anticipate having our pants down again, but they’re sagging a bit relative to China.
If the U.S. were being attacked by various militaries on our own home soil - and it turned into a life and death struggle, I’m sure conservatives would support equipment being commandeered if necessary to produce war materials to fight.
The things we’re talking about with how to fix our economy have NOTHING to do with that scenario, of course. The government staying out of the private sector will help to keep us prosperous and well-defended so that we can hopefully deter military attacks on our home soil.
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Not to worry—Congress dosen’t declare wars any longer.
Our boys just fight the wars anyway.
The problem today is that there have been so many lies from DC it is impossible to sort fact from fiction.
Think of the old story of “the boy who cried wolf”.
It is that earned lack of trust that makes cutting social programs so difficult.
If you trust leaders then you are willing to sacrifice for the common good.
If you believe them to be corrupt propagandists for their large contributors then their calls for sacrifice ring very hollow.
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