Today’s Brew 9-13-17

David Smick is in today’s Wall Street Journal talking tax reform:

The Republican Tax Plan Better Be Audacious

If the GOP proposal isn’t aimed at helping workers, Trump will ask Democrats for a counteroffer.

Ultimately, Republicans are being forced to play small ball because a group of GOP deficit hawks worry that a big tax reform would undermine the budget. This fear seems out of proportion. Since 2000, under a Republican president and then a Democratic one, the national debt has soared from $5 trillion to nearly $20 trillion. The fiscal situation will only worsen with the coming entitlement-funding nightmare. Fretting about the deficit now is like worrying about a flickering candle in the front parlor when the entire house is on fire and the roof is about to cave in. Besides, true tax reform would eliminate deductions just as boldly as it slashes rates, achieving revenue neutrality.

Republicans shouldn’t play small ball. Their goal should be a tax-reform plan that will create robust economic growth, which in turn will help heal a bitterly divided nation. What would such a plan look like? Helping wage earners via tax policy is not a simple matter. People who earn less than $50,000 a year pay an average effective income-tax rate of 4.3%. What’s killing them is the payroll tax combined with the rising cost of health care. At minimum, the standard deduction should be tripled. But reformers also need to think creatively. Tax reform, entitlement reform and health-care reform cannot be considered in isolation. Working families need relief across the board.

That requires a bigger play than what some on Capitol Hill have in mind. But in the end, growth is everything. As he was preparing to run for president in 1980, Ronald Reagan was warned in a strategy meeting I attended about John Connally, a fellow candidate in the Republican primary. Connally, a former Texas governor, was raising big bucks from big business. By comparison, Reagan’s campaign coffers were lean. The future president’s response was aggressive. “Let him have the Fortune 500,” Reagan shouted. “I’ll take Main Street over Wall Street.”

This kind of “lunch pail” capitalism won Reagan the election and transformed the GOP—and the country. Isn’t it time for more “lunch pail” policy-making from Washington?


Today’s Brew 8-9-17

See John Tamny in today’s Wall Street Journal:

WSJ Tammy 8-9-17

Today’s Brew 5-10-17

The Columbus Dispatch

Last week we pointed out Congressman Pat Tiberi’s  response to a reader of The Columbus Dispatch. Well, the reader (Corinne) is back, and she has written another letter in response to Congressman Tiberi, this time she proves she’s wrong by using Paul Krugman in her defense. It’s a trainwreck. Enjoy! And comment on the Dispatch website if you feel so compelled.

Letter: Ending regulations invites bad deals

The Wall Street Journal pays tribute to Allan Meltzer after his passing yesterday.

WSJ, Allan Meltzer 5-10-17

Today’s Brew ☕ 5-9-17

WSJ, Kemp Rushton 5-9-17

☕ Jimmy Kemp and Sean Rushton appear in today’s Wall Street Journal:

Volatile Money Hurts Growth and Trade

The dollar-euro exchange rate has moved 20% eight times in a decade, causing crisis and stagnation.

Today’s Brew 5-3-17

Cato Institute

Alan Reynolds takes on Martin Feldstein’s recent WSJ editorial at Cato’s blog.

No, an Above-Average P/E Ratio Does Not Show Stocks Are Overpriced


Writing in The Wall Street Journal on April 27–making another last-ditch pitch for a 20% border tax on business imports–Martin Feldstein asserts that unless corporate tax rate cuts are “offset” by tax increases on imports or payrolls then larger projected deficits would crash the stock market by raising long-term interest rates. “The markets’ current fragility,” he writes, “reflects overpriced assets–the S&P 500 price/earnings ratio is now 70% above its historical average–after a decade of excessively low long-term interest rates engineered by the Federal Reserve.”
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Feldstein’s latest argument for adding new import or payroll taxes relies on budget deficits pushing up bond yields and thus threatening “overpriced” stocks. Unfortunately, those claims about deficits, bonds, and stocks all rest on faulty theories and nonexistent evidence.

Man on the Margin

Man on the Margin talks about the gold standard:

A New Monetary Order


Why is the world returning to gold?  The effects of the great liquidity flood experiment introduced by Bernanke and exported to the world’s central banks is ending with an economic whimper among seriously bloated and unmanageable central bank balance sheets.  The result is global stagnation, unsustainable debt, and income inequality.  The productive and middle class decline while the crony, connected, and speculator pilot fish feed off the whale of monetary chaos.

Central banks have no idea how to extricate themselves from their liquidity flood.  The Fed is gingerly tap dancing about the idea of normalization without any real clue of how to get there.  The current plan is to stop rolling over maturing debt at some point based upon an undefined moving goal post of data determination.  The Fed only need shrink its balance sheet by the ridiculous sum of $2.0 trillion, the amount of excess reserves, to regain normalization.  Any rise in interest rates during this process will add to the national debt burden that appears unsustainable, absent a return to significant growth rates.

The Columbus Dispatch

Congressman Pat Tiberi took to the pages of The Columbus Dispatch in Ohio to defend supply-side economics.

Letter: Taxes, regulations hold back US


I respectfully disagree with the Sunday letter “Supply-side economics do not work” from Corinne Lyman. There is no question that if we raise tax rates on businesses they will invest, produce and hire less. Cutting taxes, reducing burdensome regulation and enacting other pro-growth policies unleashes employers’ abilities to grow, expand and hire. Historical evidence confirms this to be true.

When President Ronald Reagan slashed tax rates and eased burdensome regulations, the economy flourished. After the first tax rate hike of the 1990s, the nation slumped into recession. The effect of President Bill Clinton’s subsequent tax hike was only tempered by the technology boom. The economy really took off when the Republican Congress enacted welfare reform to encourage work, spending reform to balance the budget, and lower capital gains taxes to boost investment.