Our economy is weak even though lawmakers have jacked up federal spending by 11 percent, to nearly $3 trillion. That includes $333 billion in “emergency” spending and an “economic stimulus” package that, again, involved mailing a check to every taxpayer. Yet liberals still push for more federal spending.
In a way, though, that’s understandable. After all, lawmakers (like any of us) enjoy being in charge and they like to imagine they can control the economy. But in reality, they simply can’t.
There is, however, a proven way the government can improve the economy: reduce tax rates on productive Americans.
Consider the 2003 tax cuts, which slashed rates for workers and investors. That created incentives for growth, and Americans cashed in. In the next year and a half, the stock market climbed by one third and our economy created some 300,000 new jobs. In the next two years, we added 5 million more new jobs, and overall economic growth rates doubled.
These tax cuts are set to expire during Obama’s term, however. The best way for him to boost the economy would be to press lawmakers to make these tax cuts permanent. That way, businesses would be assured their tax rates aren’t about to rise.
Cutting taxes the right way has worked to boost the economy before -- as recently as 2003, in fact. Instead of repeating past mistakes, let’s hope President-elect Obama makes cutting taxes his first order of business.