Is the Kerry-oke Machine a Broken Record?

by Burt on March 8, 2011

Are our politicians giving us a song and dance? President Obama has proposed a 2012 national budget with more than a one trillion dollar deficit (that’s $1,000,000,000,000). Republicans in the House have suggested a modest $60+billion in cuts, which still leaves us with a trillion dollar deficit.

“I don’t believe that what we have from the House is a serious economic plan,” Senator John Kerry responded. Many observers might agree–the cuts are too timid. But Kerry meant the opposite: “I think it’s an ideological, extremist, reckless statement. . . . It would contribute to the reversal of our recovery, might even destroy our recovery.”

Kerry’s statement is poorly reasoned on three counts. First, with 9% unemployment we are still in a recession. Second, cutting the federal spending would allow American taxpayers to keep more of their money, and spend it on what they want rather than what politicians and bureaucrats want. Thus, the proposed cuts in federal spending will help recovery, not hurt it. And third, the historical record strongly supports some combination of cutting spending and tax rates, not deficit spending, as the best way to recovery.

Example No. 1: The 1920s. After WWI, the U. S. had much deficit spending and almost 12% unemployment. Presidents Harding and Coolidge sharply cut federal spending (and tax rates as well) and unemployment dropped from 12% to 2.4% in just two years (1921 to 1923).

Example No. 2: The 1940s. After WWII, the U. S. had record deficit spending and President Truman and Congress drastically cut federal spending and corporate tax rates. The result–in 1946 and 1947, the U. S. had only 3.9% unemployment.

Example No. 3: The 1980s. After large deficits under President Carter, President Reagan slashed income tax rates, especially those on larger incomes (from 70% to 28%). The greater freedom for Americans to spend their own money led to recovery by 1983.

In all three examples, recovery came in two years or less by letting Americans keep more of their money and giving less to the federal government to spend. Senator Kerry needs to change his tune before the whole nation ends up singing the blues.

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