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Romney's Plan to Get the Economy Growing Again

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.
The core of Barack Obama's campaign is built upon the fallacious idea that Mitt Romney's plan to get the economy growing again will take us back to the policies that caused the Great Recession in the first place.

And what are those policies? Well, he's certainly talking about Romney's belief that a chronically weak, bed-ridden economy that has all but stopped growing is badly in need of a stronger booster shot: specifically, federal tax cuts to spur needed capital investment, industrial expansion, and business start-ups that will create millions of new jobs and slash unemployment.

In Obama's confused world view, the tax cuts enacted by President Bush, along with deregulation and other pro-business policies, caused the sub-prime housing collapse that led to the economy's downfall.

That's right, the very same tax cuts Obama grudgingly decided to keep in place at the end of his second year in office for fear that higher tax rates would further cripple an economy that was still on the critical list.

Many actions caused the recession, but the chief culprit was a concerted effort by Democratic leaders in Congress to lower and virtually erase mortgage eligibility standards in federal lending programs for lower income people.

You won't find any words of condemnation from Obama that the seeds of the sub-prime mortgage collapse were caused by members of his own party or by homebuyers who shouldn't have qualified for housing loans in the first place. In his left-tilting mind, it was Wall Street and the big banks that caused the economy's collapse, not the federal government's mortgage giants, Fannie Mae and Freddie Mac, whose bailouts have cost taxpayers tens billions of dollars.

Yet Obama is still out there on the hustings telling voters that Romney's economic and fiscal agenda would take us back to those days.

But let's look at what Romney is really proposing and why it is far more effective way to make our economy healthy again.

First, he would make the Bush tax cuts permanent and thus end the last four years of business uncertainty that's paralyzed our economy. Risk-taking doesn't happen when you don't know from year to year if your taxes are going to shoot up to job-killing, profit- cutting levels.

That would not only encourage economic expansion but employer hiring as well. It would unlock capital investment that has been tepid at best under Obama's plan to raise the 15 percent capital gains tax to 20 percent or higher.

Second, Romney wants to cut tax rates further, both for businesses and the middle class.The 35 percent corporate income tax is the highest in the industrialized world and makes us less competitive in the global economy. He'd cut it to 25 percent.

Obama rejects Romney's tax cut plan, saying it will favor the rich at the expense of the middle class and would drive up the budget deficits. But there are really only two ways to effectively cut the budget deficits, and raising taxes --as Obama proposes -- is not one of them.

One is through stronger economic growth and sharply reducing the unemployment rate. Putting tens of millions of workers back on the income tax rolls, along with millions of new businesses, will boost federal revenues. The other is to reduce federal spending. Romney's plan does both.

You do not hear Obama talk about economic growth. It's a foreign language he doesn't understand and never will.

His approach from the beginning is that, as in the New Deal's failed policies in the 1930s, government can create jobs by spending a lot money. But his $800 billion-plus infrastructure spending plan was a spectacular and costly failure.

Why? Because the politically-chosen list of federal, state and local projects he invested in touched only a relatively small part of the economy. And when each contract ended, and the money ran out, so did the jobs.

Permanent tax cuts are the most effective way to reach every nook and cranny of the nation's economy. Instead of spending hundreds of billions of dollars borrowed from China and driving our government deeper into debt, lower tax rates are designed to flow throughout our economy's blood stream, like a fast-acting antibiotic.

Obama and his Democratic allies insist that they will not work, but we have at least three examples where they did work with spectacularly good results -- two of them under Democratic presidents.

President Kennedy's across-the-board income tax cuts in the 1960s met with strong opposition from naysayers who insisted, like Obama, that they would worsen the deficits. But by the end of '60s, increased tax revenues led to a budget surplus and a stronger economy.

Like Obama, President Reagan inherited a recession-battered economy, though he faced higher unemployment (10.8 percent at its peak). He, too, cut taxes across-the-board, and the economy began to recover after two years. When he sought reelection in 1984, the economy was growing at 6.3 percent and the unemployment rate had fallen to 7.3 percent. He carried 49 states.

Bill Clinton never utters a word about the GOP capital gains tax cut bill he signed in his second term to spur new investment, but it is widely credited by economists for the soaring tech-driven economy that followed -- driving the unemployment rate down to 4 percent.

Romney's recovery plan also contains other pro-growth components, too. Among them: A doubling of U.S. exports by ending Obama's moratorium on new trade agreements; lifting Obama's blockade of the oil pipeline from Canada that would have created 20,000 jobs; and ending offshore limits on oil and gas exploration to boost energy supplies and flatten gas prices.

Meantime, does anyone know what Obama's agenda would be in a second term? He certainly did not offer any specific plans in his convention address to get the U.S. economy growing again. "If Mr. Obama has a plan, Americans who listened [last] Thursday don't know how he would achieve it," the Washington Post said in an editorial.

Instead, Obama offers us more of what we've seen in the last four years: a mediocre economy and ever higher unemployment. Had enough?

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