Saturday, March 24, 2012

Party Like It's1924.Coolidge's Free Market/Low Tax Growth Recipe Presaged Reagan's/Palin's

Wikipedia canvasses Calvin Coolidge's life and presidency. AT THIS LINK We can read of a life of probity, dedication to duty, loyalty to wife and family and to America.

We see a firm believer in reform where necessary, respect for minorities especially the Black community, and an absolute belief in the most free market, effectively regulated, business environment. A steadfast hold to the constitution, and small government, with states rights holding the paramount place vis a vis government intervention.

His tax cut regimen, encouragement of sunrise industry, and retirement of government debt presaged an equally prosperous time created by Reaganite policies which echoed Coolidge's. The current recession, and the unimaginable build up of government debt in trying to reflate the economy, instead of leaving market forces to  do the job, shows that the lessons of the Coolidge/Reagan, and to some degree the second Clinton term, have been neglected to unimaginable cost.

The recipe for recovery is as it has always been, sound money, sound taxation, a caring safety net, low inflation and a balanced budget. This is what Palin calls "the common sense solutions that the country needs" but which the current administration seems deaf to. Hopefully the point will be reached where an administration that believes in, and implements, the Coolidge/Reagan policies, will be swept into office-before it is too late.

Coolidge's Economic Policies (emphasis mine);

During Coolidge's presidency the United States experienced the period of rapid economic growth known as the "Roaring Twenties". He left the administration's industrial policy in the hands of his activist Secretary of Commerce, Herbert Hoover, who energetically used government auspices to promote business efficiency and develop airlines and radio.[108] 

With the exception of favoring increased tariffs, Coolidge disdained regulation, and carried about this belief by appointing commissioners to the Federal Trade Commission and the Interstate Commerce Commission who did little to restrict the activities of businesses under their jurisdiction.[109] The regulatory state under Coolidge was, as one biographer described it, "thin to the point of invisibility."[110]

Coolidge's economic policy has often been misquoted as "generally speaking, the business of the American people is business" . Some have criticized Coolidge as an adherent of the laissez-faire ideology, which they claim led to the Great Depression.[111] On the other hand, historian Robert Sobel offers some context based on Coolidge's sense of federalism: "As Governor of Massachusetts, Coolidge supported wages and hours legislation, opposed child labor, imposed economic controls during World War I, favored safety measures in factories, and even worker representation on corporate boards. Did he support these measures while president? No, because in the 1920s, such matters were considered the responsibilities of state and local governments."[112]



Coolidge's taxation policy was that of his Secretary of the Treasury, Andrew Mellon: taxes should be lower and fewer people should have to pay them.[113] Congress agreed, and the taxes were reduced in Coolidge's term.[113] In addition to these tax cuts, Coolidge proposed reductions in federal expenditures and retiring some of the federal debt.[113] Act of 1924, which Coolidge's ideas were shared by the Republicans in Congress, and in 1924 Congress passed the Revenue   Act of 1924 reduced income tax rates and eliminated all income taxation for some two million people.[113] 

They reduced taxes again by passing the Revenue Acts of 1926 and 1928, all the while continuing to keep spending down so as to reduce the overall federal debt.[114] By 1927, only the richest 2% of taxpayers paid any federal income tax.[114] Although federal spending remained flat during Coolidge's administration, allowing one-fourth of the federal debt to be retired, state and local governments saw considerable growth, surpassing the federal budget in 1927.[115]

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