Sunday, October 18, 2009

Obama, JFK, and George W. Bush

Obama and his promoters are known to compare him to JFK, even going to the level of dressing and doing Michelle's hair to look like Jackie. However, I remember JFK, JFK was a president of mine, and Obama is no JFK. Below I will outline a major policy difference between Obama and JFK on a fundamental issue.

During a visit to West Germany in 1961, Chancellor Ludwig Erhard impressed upon JFK the idea of cutting taxes to create growth. Erhard instructed JFK to avoid the British model of high taxes, which had all but killed economic growth in England. This frustrated liberals in JFK's own party when Kennedy delivered a speech to the Economic Club of New York in which he rebuked the critics: "Our true choice is not between tax reduction... and the avoidance of large federal deficits...It is increasingly clear that ... an economy hampered by restrictive tax rates will never produce enough jobs or enough profits."

JFK favored tax cuts, but not to jump start the economy, it wasn't in recession, but to generate wealth that would produce more tax revenues. Put simply, Kennedy realized that government could grow with tax cuts if there were no corresponding spending cuts. This is where he departed from the conservative ideas of small government and reduced government spending to go along with tax cuts. He reduced the top tax rates by 21% and 6% from the lower income tax rates. He added depreciation incentives for new plant and equipment purchases, framed in Keynesian defenses. Yet it was pure Melonism: giving those at the top a large cut so that they could invest, start new firms, and add production facilities, employing still others who themselves would pay taxes. Critics typically called it trickle down economics, but it was common sense, and it worked. Over the next six years, personal savings rose from a 2% annual growth rate to 9%: business investment rose from an annual rate to 2% to 8%: GNP rose by 40% in two years; job growth doubled; and unemployment fell by 1/3.

Federal income rose, and Walter Heller, a Keynesian economist who had tried to talk Kennedy out of the tax cut, admitted in testimony to the Joint Economics Committee in 1977 that the tax cut paid, "for itself in increased revenues...(because) it did seem to have a tremendously stimulative effect."

This is the same policy that Ronald Reagan and George W. Bush implemented; Obama's plan is the opposite of Kennedy's, but the same as Carter's and Hoover's. Reagan wanted to shrink government but was thwarted by Tip O'Neil and then Jim Wright in the Democrat controlled House, Bush truly believed in cutting taxes to increase the government's revenue by growing the economy, but then using that money to grow government as did JFK.Once again, Obama is surely no JFK. The irony is it was actually George W. Bush who was almost a politically ideological clone to JFK. Even if you consider that it was under JFK that his Attorney General Robert Kennedy implemented a system to listen in on every phone call in America for key words, if these words were used it called for an audit of the call. This system was pretty much what we have lived with ever since until the Patriot Act where it was updated to be able to monitor foreign calls that are routed through an American server to monitor for terrorist activities.

How ironic that the man that the current liberals hated everything thing about, George W. Bush, was nearly a political clone to their own iconic hero John F. Kennedy. It shows how far left both parties have moved in the last generation.

1 comment:

  1. Here's my question, Harding, JFK, Reagan, and GWB, have one thing in common, that no other Presidents have. These 4 Presidents, implemented across the board tax cuts, to stimulate the economy, and in each case, set Treasury Records, as far as total revenue collected. I did not know this, until hearing it on Glenn Beck's radio show. GWB's Administration holds the all time record for revenue collected, and it was during the 53 straight months of recovery.