Clinton’s Pledge on Debt <br>Emerges as a Risible Claim, <br>In Light of Her Platform

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The New York Sun

A risible headline comes courtesy of Hillary Clinton. “I am not going to add a penny to the national debt,” she promises. Raucous readers are permitted a moment to compose themselves.

Let’s be generous and take the former secretary of state at her word. Seriously. How does she plan to pay for the largesse of her presidential platform, be it infrastructure and research spending, enriching ObamaCare, subsidizing college — among other emoluments to its base?

Vote-buying is an art form among Democrats, who no longer camouflage the contours of their platform, summarized as any number of “soak the rich” vendettas, targeted through income, capital gains, corporate, or inheritance tax hikes. “We’re going to go where the money is,” Mrs. Clinton admits in a restatement of what is called “Sutton’s law,” after Willie “The Actor” Sutton. “We’re going to make the wealthy pay their fair share.”

Without doubt, a cheer erupts from Mrs. Clinton’s constituency, exulting over their supremacy over “the other,” ignorant that no one escapes the consequences of tax increases, the poor and middle class least of all. Revenge is a dish best served as cold comeuppance.

Before even contemplating the national debt — and debt reduction rarely rates reflection — tackling the deficit is a requisite first step, by any one of these three policies: One, by cutting expenditures. Two, by raising taxes for a rise in revenues. Three, by lowering taxes for a rise in revenues.

Numbers two and three are not typos, but variations on Laffer curve analysis that an optimum exists in marginal tax rates (approximately 20 percent) for revenue generation; raising taxes beyond this optimum will result in diminishing returns.

Should anyone be in doubt, traditionally Democrats choose the second option, the Republicans the third, and both parties noncommittal about number one — the sine qua non to return America to limited, constitutional government.

“Clinton’s plan to tax more and spend more may in fact increase the national debt by hundreds of billions of dollars,” WEX reports. By ignoring Laffer curve dynamism, “her tax hikes could slow the economy down” so that projected revenue is insufficient to cover projected Democratic Party-favored expenditures. A Tax Foundation study concludes her plan would, over a decade, result in $1.5 trillion in new spending programs versus $663 billion in collected taxes, with 697,000 fewer jobs created.

Yet let’s not get ahead of ourselves. These musings have been based on Mrs. Clinton’s “no new debt” pledge. The debt will grow, as it inevitably must, whether in the short-term under a rationalizing Republican administration or ad infinitum under Democrats and their GOP fellow-travellers.

It may be that President Clinton’s eight years in office returned America to a balanced budget. He, however, began reaping the rewards of the Reagan tax cuts and the resulting boom. And he was a Democrat who was prepared to admit that, at least for his generation, the era of big government was over.

What a difference a generation makes. President Obama’s two terms doubled the debt to nearly $20 trillion. Mrs. Clinton, meantime, is running far to the left of where her husband ran for office and of whence he governed. She is crosswise with pro-growth policies.

“Want to bring your population out of poverty?” analyst and former intelligence official Herb Meyer asks. “You need free-market economics, property rights, the rule of law, stable financial systems, reasonable regulation and taxation. You put that in place — BOOM — your country comes out of poverty.”

The economic triad of rule of law, property rights, and sound money — which counter the nemeses of cronyism, interventionism, and redistribution — regained currency in the 1980s as supply-side economics and became indelibly known as the miracle of Reaganomics (and, in Britain, as Thatcherism).

Partisanship stand in your way? Dispel it through its nineteenth-century nomenclature, “the law of markets,” that reached its explicatory apogee in political economists J.B. Say and J.S. Mill. Exchange means exchange was its ethos and the inexhaustibility of demand its engine; rebutting with finality and prescience the latter-day Keynesian fallacy of demand deficiency, which served only as cover for political intrigue and aggrandizement under the guise of eliminating poverty.

Economic growth is the route to eliminating deficits and debt, the route to employment and prosperity (and immigration reform). Any other path is the wrong one and, unlike Hillary Clinton’s pledge not to grow the debt, no laughing matter.

Mr. MacLean maintains the weblog The Organic Tory.


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