John F Kennedy (D) on Tax Cuts

October 26, 2012

Today Republicans are generally for tax cuts to stimulate an economy. Democrats are generally for stimulus spending to simulate an economy. There are plenty of examples of Republicans increasing spending as George W Bush did and plenty of example of Democrats cutting taxes as JFK did.

Which policy is better?

John F Kennedy’s speech on top to bottom income tax cuts. Some of these old time Democrats views were spot on!

Broad across-the-board tax cuts are the best way to stimulate an economy. JFK stated it pretty well. Permanent tax cuts allow businesses and individuals to make plans based on the assumption that they will be able to invest more. Knowing they can invest more and pay more also means they will loan more for expansion setting off a virtuous cycle of growth, jobs, and a better economy. Even better, tax cuts go to businesses and individuals that are profitable and taking risks – just the type of things an economy needs more of to recover. Stimulus spending on the other hands often goes to unnecessary projects like additional roads, industries that are struggling due

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to over capacity, and politically connected groups. Worse, stimulus is assumed to be a short term program so companies are happy to get stimulus dollars but will not change their expansion plans and thus no virtuous cycle of growth is created. When the stimulus ends, the economy goes back to the old poor level or even a lower level now saddled with more debt.

Modern Democrats should go back and watch old JFK videos – that young president knew what he was doing, unlike the armature in the White House

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