Monday, October 19, 2015

Nobel Prize Economist Says Growth is Key

Pro-Growth Economist Angus Deaton Echoes JFK

Economic growth is key to getting out of poverty.  High taxation and high regulation inhibit growth, and therefore lead to more poverty and greater inequality of income.

Conservatives have argued this for years.  Ronald Reagan was criticized for his "tax cuts for the wealthy", but lower tax rates led to higher tax revenues and greater economic growth.   Those tax cuts were followed by a long period of economic growth.

President Kennedy also argued for lower taxes to provide for higher growth.  At the time the highest tax rate was 90%.  That rate has already been proposed anew by candidate Bernie Sanders.

Many people on the left repeat the theme of "trickle down economics" when referring to this lower tax for higher growth meme.  In fact, trickle down has never been an accurate description of what occurs here.  What does happen is tax payers are allowed to keep more of their income to spend as they wish versus sending it to the government to spend.  When people have more money to spend or invest they do so.

There are several factors the impact the economic engine that we can control.  Taxation is one, and regulation is another.  Reducing both would be a good step toward growing the economy and raising the economic position of many, including lifting them out of poverty.

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