The proof is in the pudding, or in this case the first quarter GDP numbers (up a “smokin” 5.3 percent). The single biggest thing the Bush administration has accomplished has been unleashing market forces with tax cuts and free trade agreements in a way that has outdone a Federal Reserve engineered recession, terrorists and mother nature. Larry “destined for Fox News” Kudlow is calling it “the greatest story never told”:
The greatest story never told continues with the latest GDP report that shows strong growth, low core inflation, and record after-tax profits…
Economic pundits keep telling us about the impending slowdown. Well, theyâ€™ve been waiting for a slowdown for years. Actually, Iâ€™ve heard about this slowdown for 25 years, ever since Reagan restructured and revived American capitalism through low tax rates, deregulation, and disinflation.
The reality is about 3.5 percent growth since the early 1980â€™s with very few interruptions. Total employment and wealth creation have soared during this entire span of time.
Thereâ€™s a lesson here: Tax incentives matter. Price stability matters. Markets are smarter than central planners.
Meanwhile the budget deficit, never that large as a percentage of GDP considering the unparalleled challenges of the last 5 years (two wars, the most savage attack ever on American soil by foreign powers, a recession and a series of natural disasters at home and abroad) is on track to be cut at least in half without cutting spending. The April budget surplus was nearly twice that of the previous fiscal year and year to date the deficit is down 52,783,000,000 or 22 percent from last fiscal year. Think what could happen if we adopted Ron Paul’s plan from his 1988 presidential campaign of just not replacing federal bureaucrats who quit or retire. For anyone who considers human freedom and prosperity good things this definitely is the greatest story never told. That’s why we don’t mess with markets.