Some people, even some very prominent economists like Nobel Prize winner Paul Krugman simply cannot get their heads around the idea that letting people keep more of what they earn is the best kind of economic stimulus there is. Instead, despite years of hard data proving otherwise, they still maintain more spending by the government is what greases the wheels and keeps the economy running.
This is nonsense. The tax cuts of the 1920s, the 1960s, and the 1980s were all followed by periods of remarkable growth in the U.S. economy. The spending binges pushed by FDR, by Richard Nixon, and among others, Barack Obama did little to fuel the engine of productivity or raise living standards.
The latest experiment, if it need be called that, was the Tax Cuts and Jobs Act proposed by a Republican-led Congress and signed into law three years ago by President Donald Trump. Progressives derided the legislation as “welfare for the rich” that would see the “poor get poorer.”
The progressives were wrong. After the TCJA became law, optimism among Main Street business leaders reached an all-time high in the third quarter of 2018 while the unemployment rate reached a generational low. Before the implementation of lockdowns as a mostly Blue Strategy for combating the novel coronavirus, the economy added 5 million jobs while unemployment among women, people of color, and workers without high school degrees reached record lows.
Thanks to the reworking of the tax code by the TCJA, American business started to put money into itself again. Core investments in equipment and other business necessities reversed its five-year downward Obama-era trend, shooting back up, adding to productivity, and raising workers’ wages. And, most distasteful of all to liberals whose economic policies are all about spending your money like it was theirs, federal revenues reached an all-time high because more Americans were working for bigger paychecks in businesses that were expanding.
This is what Joe Biden has promised America he’s going to undo. That’s the practical effect of his promise to “repeal the Trump tax cuts” which, in his mind only benefited the ultra-rich like him. He and his party win votes by exploiting the resentments that exist in America between those who are well off and who work hard and those who don’t. House Speaker Nancy Pelosi, D-Calif., may think the $600 per person being doled out in the latest COVID-19 relief bill will stimulate the economy – but that will be hard to do while other benefits provide a disincentive for people to go back to work in the places they can. Believe it or not, there was a hiring crisis in the Red States once their economies got moving again during the pandemic because some folks decided, rationally enough, they’d rather stay home and collect unemployment plus rather than go back to work.
They – and Biden and his incoming team of economic advisers – don’t know what they missed. Figures released by the Federal Reserve show low- and middle-class families saw large gains in wealth growth in 2018 and 2019. Low-income families saw their net worth increase 37 percent while middle-class families saw their net worth increase 40 percent.
Figures supplied by the House Ways and Means Committee show household income reached new highs as real median U.S. household income in 2019 rose nearly 50 percent more than during the eight years Barack Obama was president. Median household incomes increased 7.1 percent for Hispanics, 7.9 percent for Blacks, 10.6 percent for Asian Americans, and 8.5 percent for foreign-born workers while wages for minorities and women and young people grew at a faster pace than they did over Obama’s second term.
The Tax Cuts and Jobs Act worked, so well in fact it established the foundation for what should be – and looked like it was going to be a rapid recovery from the pandemic lockdowns. Instead, we have Joe Biden hinting that higher taxes, new taxes, carbon taxes, and other taxes are coming even if – as he unbelievably promises – families making less than $400,000 a year won’t pay a single dime more.
It’s sad really. With all the evidence showing Jack Kemp and Ronald Reagan were right, that a rising tide does lift all boats, Biden would rather pursue policies that play to the rhetoric of classically socialist class envy while ignoring the need to create an environment in which opportunities exist for those who most need them.
The opinions expressed by columnists are their own and do not necessarily represent the views of AmericanActionNews.com.
Look, See, Listen, Hear, Think, compare truth with how emotional ninnies act, step out and you act according to factual tested truths with resources others can provide and the idiot greedy folks of all occupations will rise to the top of the cesspool (swamp), don’t feed them and they will fade away screaming that its not fair or constitutional,spitting and sputtering, waving fingers and calling deplorable folks names just because we will not kow-tow. Cheers to those with brains in charge of emotions. Merry Christmas
Would be nice if you were right. The folks in the lowest income bracket realize a gigantic extra $60 per year. The one percenters saw almost $50000 per year. And the corporate world saw billions & guess what they did with all that money. Stock buy backs not salary increases for staff. The federal government spends a couple of billion dollars in food stamps for full time Walmart employees because of their low wages. And over a trillion dollar deficit with promises that the cuts would result in balancing the budget. Believe that and I got a bridge I can sell you.
Jim you really should read something other than left stream media. You must be a ooor money manager to be so ignorant of facts.
Trump has been driving and pushing the cart loaded with Americans and democrats, imagine if he had a little democrat help.
All I can say the Commie Liberal Progressives are NUTS when it comes too TAXES… I rather have a Baby run the Country instead of Biden…… He will crucify this Country period…
I agree with you full heartedly Joseph and I’m afraid of what senile Joe and/or Socialist, Marxist or Communist KH are going to do to our economy, ear drums , intellects, spirit and freedoms.
If I might impose upon you to please reconsider using the verb ‘crucified’ it is too hallowed and historically Christly to be associated with Pro abortion Socialists, Marxist, Communist and un-America hypocrites.
synonyms: tear apart, condemn, severely criticize, attack
Your friend, Elizabeth Ripton
You have that right, just look at Taxifornia, people are bailing faster than popcorn popping in a pan of oil. The fact that Newsence is destroying our economy with the highest taxes in the nation and his policies and regulations are stagnating California’s economy is taking a serious toll on our lives says it all. Big business has left, pretty soon he is going to tax our homes where we can’t afford to keep them and like the people in tents all across the fruited plain more people will leave. Democrats are the scourge of America, they love the Bearish economy killing any actions leaning toward the Bulls. God help us in the next four years if Biden gets to keep the election results.