Establishing his credentials as a pro-growth supply-sider, the Californian told more than 25 million television viewers (more eyes than John Kerry got on the last night of the Democratic convention) that ?If you believe that your family knows how to spend your money better than the government does, then you are a Republican!? He went on to talk about faith in the free-enterprise system and the resourcefulness of the American people. He slammed the pessimistic Kerry camp, saying, ?Don?t be economic girlie men!?
Schwarzenegger reminded viewers that the American economy is the envy of the world, with the highest economic growth rate of any industrial country. Then he mocked, ?Don?t you remember the pessimism of 20 years ago when the critics said Japan and Germany were overtaking the U.S.? Ridiculous!?
Let?s examine this viewpoint.
Almost 25 years ago, Ronald Reagan, the true father of modern Republicanism, launched an economic-growth program of tax cuts, deregulation, and trade liberalization. Since then, the U.S. has enjoyed virtually uninterrupted prosperity, registering only five negative GDP quarters since 1982. According to Federal Reserve statistics, family net worth during this period has grown by an astonishing 340 percent.
As the top marginal tax rate was slashed from 70 percent way back then to 35 percent under President George W. Bush, the economic pie has nearly tripled. Successful individuals have kept more of what they?ve earned through a near 167 percent gain in after-tax economic incentives.
Economist Bruce Bartlett has written that widespread American prosperity over the past two decades has depleted the ranks of the poor and middle class. Simply put, everyone has grown richer. The number of people at the low-end -- making less than $25,000 a year -- has dropped to 29 percent from 33 percent. The number making more than $75,000 a year has risen to 26 percent from 15 percent. The prosperous U.S. economy has silenced the class-warfare argument. It has lifted all the boats.
Contrast this with the heavy-handed government-planning policies of Europe and Japan. Those formulas have only produced economic stagnation -- and, regrettably, a kind of international class envy aimed at the United States.