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Wednesday, May 09, 2007
Larry Kudlow :: Townhall.com Columnist
Dooming Themselves to Defeat
by Larry Kudlow
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The Democratic party may be convincing itself that it’s riding high in the polls toward a White House victory in next year’s election. But you know what? On two key themes -- taxes and national security -- the Democrats may be dooming themselves to defeat.

Watching the two presidential debates, one can’t help but notice the stark differences between each party’s approach to these core issues. And it’s hard to see how the general electorate is going to buy what the Democrats are selling.

To a person, each Democratic presidential candidate wants to undermine the global war against jihadist terrorism -- wherever it may be and especially in Iraq. The Democrats see a civil war in Iraq, where the Republicans view a growing al Qaeda threat. And while Republicans talk about significantly increasing the defense budget and expanding American force levels for all the armed services, the Democrats are hoping for some sort of Iraqi peace dividend upon immediate withdrawal -- one that can be re-channeled into higher domestic social spending.

To a person, each Democratic presidential candidate also wants to raise taxes on the rich and roll back President Bush’s tax cuts. The Republicans, however, understand that those tax cuts have propelled economic growth and contributed to a stock market boom. And they recognize that Bush’s Goldilocks bull-market economy -- which I call the greatest story never told -- relies on extending the investor tax cuts and perhaps even moving forward with a flat tax or national sales tax.

Finally, to a person, each Democratic presidential candidate also has it in for corporate America. The Democrats discuss various punishments for business -- especially oil companies, but also drug, utility, and insurance firms. Not so for the Republicans, who talk about helping businesses and promoting entrepreneurship in our successful free-enterprise economy.

The differences between the two parties couldn’t be clearer, and next year the voting public will have a very stark choice. But with this election season only two debates old, that choice already favors the Republican position.

Think of it: The Democrats talk about ending “tax cuts for the rich,” all while bashing American corporations. But isn’t this is the same tired message that sunk Al Gore, Mike Dukakis, Walter Mondale, and Jimmy Carter? It’s never been a winner, and it’s going to help cripple whoever grabs the Democratic nomination next year.

And as former Commentary editor Norman Podhoretz has written, as the Democrats pay too much attention to the left wing of their party, their defeatist, weak-on-national-security riff may have already sunk them in 2008. Continued...

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About The Author

Lawrence Kudlow is host of CNBC's Kudlow & Company

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Old Man wrote:

"BS and I and you can argue how tax cuts do and don't work all day and we will accomplish nothing because the problem is out of control spending."

We could talk about out-of-control spending, but that accomplishes nothing since in the long run we're all dead. Point being, we'll argue what we choose to argue, thank you very much!

As for out-of-control spending, here are three ways to help fix Social Security:

1. Increase the retirement age. In 1930, the average life expectancy for a 15-year-old (close to entering the labor market) was 66, In 2003, the same number was 78. That the eligibility age for Social Security has remained 65 is ludicrous. It should be at least 70 today and increasing in the future.

2. Cut benefits. In 1940, the average monthly Social Security payment to retirees was $22.71; in 2004 it was $954.90. Taking inflation into account, this is an increase of more than 200% in real terms ($22.71 in 1940 was worth about $306 in 2004). Social Security was not meant to keep the elderly living under the conditions to which they've become accustomed; it was designed to keep them off of the streets.

Means testing should also be included in this area - Warren Buffett doesn't need Social Security.

3. Move funding from a payroll tax to a general income tax. This was originally the plan, but it never happened. If the contribution of the wealthy wasn't capped at the first $100,000 or so of earned income but was rather a percentage of all of their income, you can be sure that fixing the system would be more of a priority among the politically powerful.

.

Correction

I said:

"Of course, with the national savings rate in negative territory for two years now, this doesn't seem to be happening in reality. And also, if tax cuts replace tax revenue with increased borrowing (a proxy for future taxes), as has happened with the Bush tax cuts, there is no way for national savings to increase from them."

I should have said:

"Of course, with the PERSONAL savings rate in negative territory for two years now..."

http://www.bea.gov/briefrm/saving.htm

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