The Surrender Budget

By John W. Childs Special to the Sun June 5, 2021 @ New York Sun

President Biden’s budget has drawn a lot of flack from conservatives. Larry Kudlow notes that it would put the country on the path to a growth recession. The Wall Street Journal points out that it would essentially require the Federal Reserve to maintain abnormally low interest rates for a decade. A troubled domestic economy notwithstanding, the worst thing about this budget is the national security implications — it risks putting Communist China into the passing lane.

This might have been overlooked by the press because President Biden released his budget proposal on Friday, just before Memorial Day. The maneuver, Mr. Kudlow has pointed out, is standard tactics designed to bury a story. This is certainly a budget proposal that deserves burial. One might almost suggest cremation except these massive tax increases deserve to be buried unurned.

Mr. Biden’s Memorial Day gift to Americans was a tax increase in virtually every aspect of life. There were increases in income taxes, capital gains taxes, corporate taxes, and estate taxes. That is evident without even reading the fine print. It’s so crosswise with economic logic as to suggest that Mr. Biden, despite his claims of unifying rhetoric, seeks to elevate class warfare to a national budget priority? Doesn’t really matter.

What does matter is that it has been demonstrated time and again that lowering taxes creates growth, while raising taxes stymies growth. President Coolidge’s tax cuts led to the roaring 20s, Kennedy’s to the booming 60s; Reagan’s to the soaring 80s and beyond; and President Trump’s 2017 tax cuts led to the superb pre-pandemic economic growth and to full employment.

On the flip side, Presidents Hoover and Franklin Roosevelt raised taxes and sustained them throughout the Great Depression. Roosevelt’s policies were so misguided that he even deepened the Depression (who would have thought it possible?), which became tragically apparent in 1937 and 1938, when, well into the New Deal, America found itself beset by the “depression within a depression.”

So Mr. Biden’s budget proposal, if history is any guide, will be a growth killer. .........To Read More....