As we now focus on the critical deliberations to respond to the impending fiscal “cliff”, I was struck by a letter to the editor by Mr. H. Paul Lasky of Spring Valley, New York, who wrote the Wall Street Journal in response to a letter from Sen. Charles Schumer in which the Senator chides the WSJ editorial board for “pretending we can achieve both rate-cutting and deficit reduction at the same time”.
Mr. Lasky refers the Senator to a speech given by President John F. Kennedy to the New York Economic Club in December 1962, in which he said his “administration pledged itself to an across the board, top to bottom cut in personal and corporate income taxes” and he further explained that “our present tax system exerts too heavy a drag on growth; it siphons out of the private economy too large a share of personal and business purchasing power; and it reduces the financial incentives for personal effort, investment, and risk-taking.” Finally, he added that “it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise revenues in the long run is to cut the rates now.”
No better validation of the efficacy of supply-side economics was ever made by the most eloquent of its political advocates, with the possible exception of Jack Kemp, and to its detriment, current Republican leadership has been derelict in the defense of a fiscal policy that has worked every time it has been executed.
