Wednesday, September 22, 2004

Kerrynomics: "Prescription for economic disaster" or "Agenda for Calamity"?

Between NRO Financial's Tom Nugent and Ralph R. Reiland in today's American Spectator, it's now wonder that John Kerry has abandoned the economy as an avenue of attack on President Bush.

Reiland details how practically every Kerry economic proposal would be a body-punch to American small businesses. "Taken as a whole, John Kerry's legislative record with respect to small business and the issues that matter most to this sector shows a preference for higher taxes, less affordable health coverage, more burdensome regulations, more frivolous lawsuits, and more government spending - an agenda that's the perfect prescription for fewer business start-ups, more bankruptcies, less entrepreneurship, less economic growth, more unemployment, slower income growth, smaller take-home pays, more poverty, more regulators, more lawyers and bigger government."

Nugent, meanwhile, (with a little help from yours truly - here, that is) takes Kerrynomics apart point by point.

Job Creation:

"If foreigners don’t do what [Kerry] tell[s] them to do, [he] will restrict free trade with the U.S. For all you guys and gals out there who work for a foreign car company or other 'insourced job,' watch out, your job is in jeopardy."

"Corporations will find [ways around anti-outsourcing incentives/restrictions]. The loss of foreign sources of manufacturing will also undermine the ability of companies to keep inflation low in this country. By raising the cost of imports and the cost of manufacturing, prices will rise."

In essence, Senator Kerry would ignite another trade war.

Cut middle-class taxes and health costs:

"...50% of Americans don’t pay taxes. So how is Kerry going to cut taxes for 98% of Americans?"
Answer: " tax cuts for college, child care and health care." Of course, there is already a child care tax credit, and a self-employed health care deduction. Why doesn't he propose reducing the 7.5% AGI floor on deductible medical expenses and then allow health insurance premiums to be included? Or would that "cost" too much?

Higher education is already grossly oversubsidized, which is why college tuitions are so high. Cutting those subsidies could help "pay" for his "targeted" "tax cuts".

Kerry says he's "proposed a health plan," which may or may not be the Hillaryesque monstrosity whose price tag is pushing two TRILLION dollars at last estimate at the same time as Canada is trying to find a way out of its Hillaryesque monstrosity.

I won't bother with his token tort reform pandering out of respect for my readers' intelligence.

Restore America’s competitive edge:

"Restore"? What can he possibly be talking about? The manufacturing sector posted a 5.8% increase in productivity in the most recent calendar quarter. Productivity is going through the roof. That's a major reason why job-growth hasn't been as robust at this stage as in past recoveries.

So what did Kerry cite? “America,” he wrote, “has fallen to 10th in the world in broadband technology.”


Geez, if that's all he can come up with, why doesn't he give Al Gore a call and offer him the job of Technology Czar? Hell, if Teraaaaaayza can have her "Department of Wellness," why can't Fat Albert have his "Department of Geekdom"? Lurch can even throw in a complimentary pocket protector.

Cut the Deficit and restore economic confidence:

There isn't any "lack of economic confidence," but I digress.

"Americans can trust my promise to cut the deficit,” wrote Kerry, “because my record backs up my word…"

{spit take, doubled over in laughter}

"In 1993, I cast a deciding vote to bring the deficit under control."

IOW, he voted for the largest tax hike in American history.

"And in 1997, I supported the bipartisan balanced budget agreement.”

The only portion of which did anything to reduce the deficit being the cut in capgains tax rates that finally turned the tepid, sluggish growth of Clinton's first term into the "" boom, which in turn generated a flood of additional tax revenue that balanced the budget without the exercise of much, if any, spending discipline. Something that nobody in either party who wasn't a supply-sider ever saw coming.

Nugent observes: "Kerry has proposed...increased spending on a variety of social programs, and a fight to punish outsourcing companies and [minimally] cut taxes for corporations that play ball while alienating foreign trading partners. These policies will undoubtedly (1) lower tax revenues and (2) increase government spending."

End result? Bigger deficits.

And how will Kerry offset those bigger deficits? "By rolling back the recent Bush tax cuts for families making over $200,000 per year..."

You know, the "small businesses [that] make up more than 99.7% of all employers in the United States and create 75% of the net new jobs in the American economy."

Nugent quotes a letter-to-the-editor in the Wall Street Journal that sums up Kerrynomics in a nutshell:

"I grew up in a lower-middle-class household. I studied hard and put myself through a good college. Ten years ago, I started my own company and for the past four years my income has exceeded $200,000 a year. Last year, I paid 40% of my income for self-employment, state and federal income taxes. From the remaining, I support five people, pay for health insurance and save for retirement. Teresa Kerry, with assets exceeding $500 million, pays less than 2% (includes her foundation income). Instead of raising the taxes on the person flying around the world on the Gulfstream G5, John Kerry wants to put a bigger tax burden on the one driving the ’97 Intrepid with more than 100,000 miles on it. While his rhetoric attacks the wealthy, his policies attack the middle class."

Michael O’Guin
Dove Canyon, CA

Who was the last American president to jack up tax rates on job-creators while simultaneously flipping off our trading partners, helping to trigger a worldwide economic collapse?

Herbert Hoover.

And they say history isn't cyclical.