With all of the electoral tip-toeing going on these days (Democrats declining to produce a budget plan, Romney supporting ethanol subsidies, Obama still blaming Bush for our current economic woes - I could go on), it is most welcome to see a presidential candidate display any measure of political mettle. In Chicago this afternoon, Tim Pawlenty unveiled a very particular economic plan that was a shot of courage for anyone tired of their leaders' ideological pusillanimity.
Republican presidential candidate Tim Pawlenty pitched an economic plan Tuesday that includes deep cuts in personal and business taxes to spur the struggling U.S. economy but would add to deficits in the short term in the hope that badly needed jobs would follow.
"Growing at 5 percent a year rather than the current level of 1.8 percent would net us millions of new jobs, trillions of dollars in new wealth, put us on a path to saving our entitlement programs," Pawlenty said in his first detailed speech on economic policy since he formally declared his White House ambitions a little over two weeks ago. ...
"We can start by applying what I call the Google Test," he said. "If you can find a service or a good on Google or the Internet then the federal government probably doesn't need to be doing that good or service. The post office, the government printing office, Amtrak, Fannie Mae and Freddie Mac were all built for a different time in our country and a different chapter in our economy when the private sector did not adequately provide those services. That's no longer the case."
Whatever else Pawlenty's plan may be (the full AP story above certainly does not seem to think much of it), it is a bold change from the normal budgetary pussyfooting. Pawlenty proposes slashing the income tax to just two brackets, cutting business tax rates, and eliminating such gratuitous measures as the death tax, cap-and-trade, and the capital gains tax. The Wall Street Journal at least thinks his ideas have some merit, as does storied Reagan economic advisor Art Laffer.
Among GOP Presidential contenders, Tim Pawlenty is offering the most ambitious reform agenda so far, and his economic address yesterday continued the trend. While details remain to be filled in, the former Minnesota Governor is rightly focusing on a growth revival that ought to define the 2012 campaign.
Most notable in symbolic political terms, Mr. Pawlenty proposed what he called the "big, positive goal" of growing the U.S. economy by 5% a year over the next decade. His policy mix is centered on building a durable expansion and boosting middle-class incomes, and his speech was notable for its optimism, avoiding the austerity temptation that traps many Republicans.
A Pawlenty spokesman told us the 5% target is realistic and achievable, and it's true that the economy grew 4.9% on average between 1983 and 1987, and nearly 4.7% between 1996 and 1999. Yet such long booms are rare in developed economies and we can't recall one that lasted 10 years.
The goal is still worthy as an aspiration, especially amid the current recovery that should be far stronger after a long and deep recession.