The Obama administration’s economic rebuilding plans aren’t panning out, so it might be time to return to proven Reagan-era tax cuts to stimulate growth, columnist Amity Schlaes wrote on Bloomberg News.
"Scholars have persuasively argued that such planning, whether it comes in the first, second, third, or nth wave of stimulus, isn't all that efficient," said Schlaes, author of the best-seller, The Forgotten Man: A New History of the Great Depression. "So the planning and the spending is bound to disappoint."
Schlaes wrote that conservative economic scholars anticipated Vice President Joe Biden's remarks recently that "the administration misread how bad the economy was."
The multiple-tax cuts of the Reagan era led to an economic boom that lasted throughout the 1980s, 1990s and the early part of this century, Schlaes wrote. The economy was stable for about 25 years, with strong growth and non-inflationary price increases. Lower taxes enabled the private sector to spend resources where executives thought most efficient, rather than spending time looking for tax loopholes.
"Citizens hunted for an invention to invest in," according to Schlaes. "The extra growth — real, productive growth — ate up the extra money.
The "policy formula that could get us out of trouble today is out there to be read. It's worth the attention of all, not just GOP nostalgists."
The economy remains "in a funk," Schlaes wrote. "Taxes are on their way up. Whether it will be abolishing some of the tax deductibility of healthcare or increasing taxes on soda, President Barack Obama and Congress are clearly signaling the direction in which they want to move."
But conservative economists and pundits aren't the only ones who are disappointed with Obama's economic strategy. He's getting pressed by liberals, too.
"The Left has grown increasingly disappointed with Obama," Eyal Press wrote in The Nation, the leading progressive magazine.
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