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Tags: economy | politics

The Political Parties and America's Assisted Economic Suicide

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Ralph Benko By Friday, 28 August 2020 09:11 AM EDT Current | Bio | Archive

"It ain't so much men's ignorance that does the harm as their knowing so much that ain't so." G.K. Chesterton was characteristically perceptive in calling this indictment of dogmatism "one of the two or three wisest sayings uttered on this ancient earth."

Now, my noble fellow conservatives are locked in an epic struggle with our arch-enemies, the perfidious progressives. The struggle is not what it pretends to be.

The real struggle? Who can dig their heels more deeply into "knowing so much that ain't so."

President Trump is digging in his heels to defer, maybe waive, the 6.2% payroll tax that funds Social Security for four, maybe 16, months. How depressingly different from the glorious Reagan years.

We intrepid Supply Siders fought to cut marginal income tax rates bigly. With bipartisan support we cut the top rate from 70% to 28%. Hey Pachyderms? Leave neo-Keynesian stimulus packages to the Dems!

Candidate Biden is digging his heels into whopping tax increases on capital, corporations and wealth to pay for expensive new goodies. Hey! I like a good handout almost as much as defense contractors do! I'm disgusted by economic inequities wherein goodies keep going to the rich and powerful (instead of me)! But hey, Donkeys? Economic policies that stifle growth make fewer goodies to dole out!

Both parties descend into dogma, the worst equitable prosperity killer, rather than keeping their eye on the ball. Equitable prosperity comes from smart economic policies. It's not partisan. Equitable prosperity was wonderful under Reagan … and Clinton. And mediocre under Bush (both!) and Obama.

What prosperity-recipes are Washington neglecting? Many. Today let's focus on just one big one: We can only get richer by learning to do more with less. This takes tools. Tools take investment.

Example? An average car packs the same power as 120 horses. The University of Maine estimates the average annual cost of a horse at $3,876. It would cost you slightly less than half a million dollars a year to get the same power from horses as from your horseless carriage. Then, there's your housing, food, medical care and other necessities and amenities. Technology lets middle class people live a 19th century's millionaire lifestyle!

One of America's most respected technology thought leaders, Norman Augustine, has observed that new tools originate in research and development. While not cheap, the return on investment is astronomical. The Internet cost Uncle Sam $124.5 million. It generated many trillions in value. Apple, alone, recently exceeded $2 trillion in value.

As The Washington Post recently reported "Along with Apple, the overachievers — Facebook, Amazon, Netflix, Microsoft and Google's parent, Alphabet — are household names that have leveraged digital expertise to prosper amid the new, socially distanced reality. Through Tuesday, these six stocks collectively were up more than 43 percent this year, while the rest of the companies in the index together lost about 4 percent."

The prosperity that tech generates is the good news. The bad news? Uncle Sam (yes, I'm talking to you, Sen. Josh Hawley!) lusts to crush America's greatest tech companies.

Even worse? Malign neglect.The technologies that enrich our daily lives and pocketbooks were not conjured out of thin air. As I have previously written:

"Christopher Mims writing recently in the Wall Street Journal:'Taxpayer-funded basic scientific research has again and again paid huge dividends to society, both in improving our quality of life and boosting our economy. Indeed, many of the industries the U.S. dominates these days, like software, were seeded in a Silicon Valley where the U.S. government was the area's first and most important venture capitalist. Since the mid 1960s, the proportion of U.S. gross domestic product spent on public R&D has gone from a peak of 2% to the present figure of 0.6%, and the U.S. went from first in the world in terms of such spending to 13th. China rocketed ahead…."

Supply-Side icon David Goldman recently told Law and Liberty: "The Chinese People's Congress, at the end of May, just approved a $2.2 trillion five-year technology budget for any number of things. I mean, 5G itself, the Chinese are spending, according to a study by Deloitte, three times what we spend per capita on 5G. They'll have the fastest rollout."

And there's worse to come. Both parties are bashing China for its successes. Meanwhile, both parties are actively forfeiting the tech race. They're killing the goose that lays the golden eggs.

The political parties are squabbling about masks, lockdowns, how to redress systemic racism. Important? Sure. Yet meanwhile, the Republicans and the Democrats both are attacking and neglecting the at least equally important roots of America's equitable prosperity and world leadership, technology.

"It ain't so much men's ignorance that does the harm as their knowing so much that ain't so."

Ralph Benko, co-author of "The Capitalist Manifesto" and chairman and co-founder of "The Capitalist League," is the founder of The Prosperity Caucus and is an original Kemp-era member of the Supply Side revolution that propelled the Dow from 814 to its current heights and world GDP from $11T to $88T. He served as a deputy general counsel in the Reagan White House, has worked closely with the Congress and two cabinet agencies, and has published over a million words on politics and policy in the mainstream media, as a distinguished professional blogger, and as the author of the internationally award-winning cult classic book "The Websters' Dictionary: How to Use the Web to Transform the World." He has served as senior adviser, economics, to APIA as an advocate of the gold standard, senior counselor to the Chamber of Digital Commerce and serves as general counsel to Frax.finance, a stablecoin venture. Read Ralph Benko's reports — More Here.

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The real struggle? Who can dig their heels more deeply into "knowing so much that ain't so."
economy, politics
Friday, 28 August 2020 09:11 AM
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