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JFK 50: The Fiscal Legacy

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Earlier this week I wrote on the fiftieth anniversary of the assassination of John F. Kennedy – arguably the most studied (yet still the most distorted) event in American history.

This column exits that particular rabbit hole and delves into something infinitely more tangible – Kennedy’s economic policies.

Upon taking office in 1961, Kennedy inherited an economy in recession (like Barack Obama did in 2009). America’s productivity was falling, its unemployment was rising and its income levels were slipping.

Unlike Obama, though, Kennedy didn’t borrow trillions of dollars and blow it on unnecessary government.

What did he do? He cut taxes – for all income earners.

And what did Kennedy’s tax cuts produce? The second-longest economic expansion in American history … which lasted all the way until the recession of 1969-70.

Obama? More than five years after passing his “stimulus” plan (and engaging in a host of other interventionist measures) he’s still presiding over chronically high unemployment and anemic economic growth.

This stuff isn’t rocket science, people … tax cuts spur growth. Meanwhile government growth only “stimulates” one thing: Government.

Liberals like to say JFK’s tax cuts were more targeted that Ronald Reagan or George W. Bush’s – and that they were specifically crafted to help the middle class. Both statements are flat out false. Kennedy’s tax cut was much bigger than Reagan or Bush’s – and its relief was spread out all along the income spectrum.

“Contrasting the size of the tax cuts with national income shows that the Kennedy tax cut, representing 1.9 percent of income, was the single largest first-year tax-cut of the post-WW II era,” an analysis from The Tax Foundation reveals. “The Reagan tax cuts represented 1.4 percent of income while none of the Bush tax cut even breaks 1 percent of income. The Kennedy tax cuts would only have been surpassed in size by combining all three Bush tax cuts into a single package.”

Meanwhile columnist Jeff Jacoby of The Boston Globe notes that Kennedy’s plan  “cut the top marginal rate a whopping 21 percentage points.”

So much for those liberal myths …

John F. Kennedy vowed in his inaugural address to “get America moving again.” And he did – by cutting taxes.

OBAMA: NO JFK

OBAMA: NO JFK

Don’t get us wrong, Kennedy wasn’t perfect on tax and spending issues. Far from it. He endorsed a lot of liberal government programs and embraced a lot of non-core government functions. On December 14, 1962 – less than a year before he died – Kennedy gave an address to the Economic Club of New York. During that speech, he outlined a number of these items (including expanded government intervention in education and more federal funding for “research and technology”).

But it’s what Kennedy said after touting these programs that matters …

“The most direct and significant kind of federal action aiding economic growth is to make possible an increase in private consumption and investment demand–to cut the fetters which hold back private spending,” he said. “The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system; and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.”

Then Kennedy – the greatest orator the White House had seen in a century (and perhaps the greatest ever) – offered one of the most concise encapsulations of limited government/ fiscal conservative ideology we’ve ever heard.

“In short, to increase demand and lift the economy, the federal government’s most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures,” he said.

Amen, Mr. President. Amen.

Too bad Obama didn’t follow your advice …

The irony in all this? Such talk today is considered the realm of the right wing “whack-a-doodle.” It’s the sort of rhetoric websites like FITSNews get tagged as “radical” for espousing.

Well, free market economics isn’t radical … it’s common sense. It’s just a shame no one in Washington, D.C. – including the vast majority of “Republicans” understands that anymore.

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