By Lawrence Kudlow, Brian Domitrovic
The attention-grabbing, suppressed background of ways JFK pioneered supply-side economics.
John F. Kennedy used to be the 1st president because the Twenties to decrease tax premiums across-the-board, changing into one of many earliest supply-siders. unfortunately, today’s Democrats have missed JFK’s tax-cut legacy and feature opted as an alternative for an anti-growth, tax-hiking redistribution application, undermining America’s financial system.
One one who JFK’s tax-cut progress version was once Ronald Reagan. this can be the never-before-told tale of the hyperlink among JFK and Ronald Reagan. this can be the key historical past of yank prosperity.
JFK learned that prime taxes that punished luck and fanned classification battle harmed the economic climate. within the Nineteen Fifties, while excessive tax premiums prevailed, the USA continued recessions each or 3 years and the ranks of the unemployed swelled. purely within the Nineteen Sixties did an uninterrupted growth at a excessive cost of development (averaging five percentage in keeping with 12 months) force an immense raise in jobs for the longer term. the variation was once Kennedy’s monetary coverage, fairly his push for sweeping tax-rate cuts.
Kennedy used to be such a success within the ’60s that he without delay encouraged Ronald Reagan’s tax reduce revolution within the Eighties, which rejuvenated the economic system and gave us one other growth that lasted for 2 decades.
Lawrence Kudlow and Brian Domitrovic display the key historical past of yankee prosperity through exploring the little-known battles in the Kennedy management. They convey why JFK rejected the recommendation of his Keynesian advisors, turning as an alternative to the guidelines proposed by way of the non-Keynesians on his staff of rivals.
We meet a desirable solid of characters, particularly Treasury Secretary Douglas Dillon, a Republican. Dillon’s rivals, similar to liberal economists Paul Samuelson, James Tobin, and Walter Heller, fought to keep up the excessive tax rates—including an miraculous ninety one% most sensible rate—that have been smothering the economic system. In a wrenching fight for the brain of the president, Dillon confident JFK of the long term hazards of nosebleed income-tax premiums, gigantic spending, and unfastened cash. eventually, JFK selected Dillon’s tax cuts and sound-dollar regulations and rejected Samuelson and Heller.
according to Kennedy’s progressive tax lower, the economic system soared. yet because the Nineteen Sixties wore on, the departed president’s priorities have been undone by means of the government-expanding and tax-hiking errors of Presidents Johnson, Nixon, Ford, and Carter. The ensuing recessions and the “stagflation” of the Seventies took the kingdom off its typical process progress and prosperity-- till JFK’s actual heirs again to the White residence within the Reagan era.
Kudlow and Domitrovic make a resounding case that the recommendations had to remedy the lengthy fiscal stagnation of the early twenty-first century are once more the free-market ideas of constrained executive, low tax premiums, and a powerful greenback. We easily have to embody the bipartisan knowledge of 2 nice presidents, unharness prosperity, and get well the greatness of America.
From the Hardcover edition.
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Additional info for JFK and the Reagan Revolution: A Secret History of American Prosperity
Economists at the time actually agreed on this point, arguing that the tax rates kept the economy on an even keel. The tax code’s sharp progressivity was an “automatic stabilizer,” a term coined in the 1940s, when income-taxes-for-everyone first came in. The logic went like this: As people made more money during economic expansions, they were thrown into higher tax brackets, and the government collected a greater proportion of national income than before. The effect of the expansion was thereby dulled, a mild recession would hit, and people would fall into lower tax brackets as their income declined.
To major in economics at Harvard but was content when he chose government over philosophy. By his senior year, 1939–40, Jack had settled, like his brother, on a government major, and he wrote a thesis on the tumult of British-German relations in the 1930s, just then about to culminate in the Luftwaffe’s blitz over London. Proud of his son’s work, though Laski called it “very immature,” Joe Sr. 5 In the fall of 1940, at the age of twenty-three, Jack headed off to Stanford, where he became the first future president of the United States to enroll in business school (the second was George W.
This indeed was his justification for jumping on the FDR bandwagon, launching the SEC, and outlawing his favorite trading practices. In 1936, he published a book called I’m for Roosevelt, which rehearsed these themes. At his Harvard reunion in 1936, his businessmen-festooned class was aghast to hear Kennedy say that he was all for organized labor. As a result of that scare, Joe Sr. wanted his sons to know about socialism and left-wing politics. , to take a year before Harvard to study in London with the socialist economist Harold Laski, today remembered as the chief antagonist of free-market champion F.