On Thursday I introduced a bill that would return the dollar to the gold standard—the first such attempt since Jack Kemp’s Gold Standard Act of 1984. Under this legislation the Fed would still exist, but it would administer the money supply rather than dictate it. Instead the market would be in charge, the supply and demand for money would match up, and prices would be shaped by economics rather than the instincts of bureaucrats.
Like President Trump, I believe that success is again possible for Americans who go to work every day and build things. Mr. Trump’s vision of how the American economy could and should work resonated with voters in 2016. Returning to the gold standard is a way for the president to deliver on his promise of American working-class prosperity.
A few days ago we noted Alan Reynolds’ brilliant response to Alan Blinder in the Wall Street Journal. Well now the readers of the WSJ have responded as well and they took up a sizable portion of the letters to the editor in today’s paper. Worth a look for sure.
Alan Blinder says the new tax law "emphasizes cutting taxes on corporations, not on people." Since no economist has ever before claimed corporate taxes were not paid by people, Blinder just resigned from the economics profession. https://t.co/AEsk7Pskyf
While the bill isn’t perfect, it will uncork new business investment and hiring, which will benefit everyone. U.S. businesses are primed for expansion. Since the 2008 financial crisis, we’ve gotten leaner, improved corporate governance, and saved. Companies are sitting on record reserves. It means we’re prepared to put the capital we’ll save from this tax cut to work. This legislation comes at the perfect time. I see companies preparing to hire and expand, my own included. We’ll use our savings to hire and invest in new projects. Roughly 70% will go to my employees, because American companies invest in the future.
Tax cuts, this bill included, aren’t trickle-down but expansion economics. In 1962, President Kennedy argued his tax plan would lift all boats. He knew that if entrepreneurs had the incentive to risk, create and build, everyone would benefit. Growth hit 5.8% in 1964, the year JFK’s last tax cut was signed into law, and 6.5% the next. It’s going to happen again. Just wait.
Your Dec. 21 edition includes a very misleading opinion piece by Jim Jenkins, who simply reiterates the same talking points that we get from the DNC, Talking Points Memo, HuffPo, and countless leftwing outfits. All claim that Republicans in Congress would cut Social Security and Medicare benefits, even though it was Democrats almost exclusively who’ve voted to cut benefits in 1993 (Clinton tax increases), 2010 (doc fix under Medicare), or raised middle-class tax rates, fees, fines, car registration, etc. in Congress and our state legislatures. Their scare tactics bring back memories of growing up in public housing, being angrily told by Democrat organizers that, if Reagan were re-elected in 1984, we would all be thrown out into the street!
In fact, Congress has cut tax rates 15 times over the last century, bringing billions out of unproductive tax shelters and foreign tax havens, leading to more jobs and revenue growth: four times during the Roaring ’20s under presidents Harding and Coolidge, import taxes in 1933 under FDR, twice during the Truman administration, and Eisenhower’s 1954 middle class tax cut, the largest in American history. The famous JFK tax cuts of 1964 saw an economic boon and more revenue the first year. The larger Reagan tax cuts of 1981 and ’86, as well as 1997 Republican Revolution saw 44 million jobs created and increased federal revenues. So did the 2001-03 Bush tax cuts.
Tax increases during the 1930s, late 1960s, 1990, 1993, and again under Obama in 2010 all drove more money into unproductive tax shelters and overseas accounts, leading to severe recessions and millions of jobs lost, less revenue, and even larger budget deficits.
A 2010 Romer-Romer study performed by President Obama’s own chief economic advisor, published in the American Economic Review, proved that maximum revenues were achieved at 33 percent, but that budget deficits are minimized with a 28 percent rate, suggesting that tax rates should be cut even more than Republicans are proposing. Likewise, countless studies have shown that the 20 highest taxed states – mostly Democrat – have seen no economic growth.
Recent polling of professional economists shows that about 93 percent support free markets, free trade, and reduced government spending and tax rates. Businesses create 1-2 million new jobs each year under business friendly Republican congressional majorities, but are forced to trim 500,000-900,000 workers annually under Democrat majorities. The problem is not just that supply side economics have been proven, but that Democrats refuse to listen, then must raise middle class taxes and cut Social Security and Medicare benefits.
Max Abramson Former New Hampshire state representative