Stagnant Growth, High Inflation Show Fallacies of Biden Economic Bible

President Biden’s economic report mentions gender 40 more times than inflation, according to a spot-on story from the Daily Caller, and it refers to inequality 147 times and emissions nearly 100 times.In Mr. Biden’s introduction to the annual report, penned by his council of economic advisers, he does not mention the word “inflation” once. This follows a pattern: In his budget release a month ago we counted more than 100 references to inequality.We know the president is in denial about the record inflation surge, which is the cruelest tax of all — to the tune of about $5,200 a year for a typical American family. I find it even more discouraging that this administration does not care one whit about economic growth and prosperity.For them, tax policy is about punishing success, redistributing income, and confiscating wealth, such as through an absolutely unworkable attempt at attacks on unrealized capital gains. The rich have to pay their fair share, according to Mr. Biden, even though the rich pay upward of 60 percent of total taxes — federal, state, and local — throughout the country.Federally, the top 1 percent earns about 20 percent of the income and pays nearly 40 percent of the income tax. I’d say that’s fair. Call it doubly fair.This woke administration has published a woke budget with a woke economic policy: sex and gender mandates, schoolroom racism, ultra-high taxes on successful entrepreneurs, massive welfare spending without work requirements, deficit finance, and inflationary money.The woke economic bible is called modern monetary theory, which says spend and create as much money as you want. It will never cause inflation to rise.Well, oops: The latest inflation readings from March were 8.5 percent CPI, 11.2 percent PPI, and 12.5 percent import prices. Kind of got that wrong, didn’t they?Modern monetary theory is being thrown out the window, I think, but there is still no emphasis from this group on economic growth. Robbing Peter to pay Paul does not create growth. Punishing innovators does not create growth. And let’s not forget the damage to what used to be the world’s greatest energy sector. The jihad against fossil fuels that continues to this day with a new regulation that would throw out the window President Trump’s NEPA permitting reforms — of course all in the name of the green new deal, net-zero carbon emissions policy that has caused oil prices to run sky-high.I have talked about the growth gap between the period following World War II and up to 2000, which was high growth, and the first two decades of the new century, which were low growth.Between 1946 and 2000, the American economy — that is, the free market, capitalist American economy — grew 3.2 percent per year. Since 2000, that growth has dropped by nearly half, at 1.9 percent per year. President Obama’s secular stagnation has ruled the new century.For the 50-plus years preceding that, U.S. growth was the envy of the world and indeed the leader in the world. The difference between 3.2 percent and 1.9 percent is astronomical. If we grew the economy at 3.2 percent yearly for the next 20 years, real GDP would total $36.5 trillion. If, however, we remain stagnant at 1.9 percent per year, which by the way is what the Biden budget is showing, then real GDP by 2041 would only hit $28.3 trillion. That’s a point-to-point shortfall of $8.2 trillion. It’s the difference between prosperity and stagnation. There’s more: When you look at the cumulative shortfall of the stagnation scenario, the output lost to America comes to $113 trillion over 20 years. That’s right, $113 trillion. From a budget standpoint, with a 17.5 percent average tax rate, that represents a loss of $20 trillion in revenue. That’s not much less than our total federal debt in public hands, which is now $23 trillion. Too many numbers? I don’t apologize. This is a very serious story and a very serious problem. Americans have shown that their system of free enterprise has in the past 50 years-plus and could in the future produce vastly more prosperity for every single person in this country. Productivity would be far greater. Business investment would be massively higher.So would real wages for average working people and their families. And you know what else? More growth from the supply-side of the economy would reduce inflation. Lower taxes, fewer regulations, energy independence, limit federal spending, balance budgets: In short, stop big-government socialism.We’ve had too much of it in the past two decades. It has strangled our economy. It’s also damaged our culture. These left-wing nostrums should be thrown out the window. Completely. Now here’s a final point, on one component of growth. Remember the Trump tax cuts? For corporations, smaller businesses, and individuals? Well this is the one area that Mr. Biden has failed to reverse. He tried, but we saved America and killed the bill. Particularly the slashing of the corporate tax rate from 35 percent to 21 percent, which despite Mr. Biden still stands today, is undoubtedly responsible for what limited prosperity we have. Now of course the left fought Mr. Trump tooth and nail back in 2017 and played the usual Washington game about warning of out-of-control deficits and inadequate revenues, as though the woke crowd cares one jot about budget deficits. So along comes our pal Dan Clifton with his new calculations that corporate tax collections coming in at the 21 percent rate are actually exceeding corporate tax collections before Mr. Trump’s tax cut when the rate was 35 percent. Got that? The Laffer curve wins again. Lower tax rates, generating a better economy, and less tax avoidance produce higher tax revenues.It just goes to show that in the real world, the supply-side view was right and the woke view was wrong. Then again, we know that. So does the rest of America. That’s why the cavalry’s coming.From Mr. Kudlow’s broadcast on Fox Business News.

Stagnant Growth, High Inflation Show Fallacies of Biden Economic Bible

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