Subscribe to our newsletter

Enter your email address:

Delivered by FeedBurner

Huntington POV: Reagan, Kennedy & Supply-Side Economics

The Cure for the Economy?

Huntington Village is comprised, almost exclusively, of independently owned, small businesses. In these dire economic times, this reliance on business places Huntington Village at the mercy of national fiscal policy. There is only one course of action, that I am aware of, that will result in a prosperous Huntington. It is a proven monetary policy that has been effectively utilized by two American Presidents during similar economic times, and deserves our present attention.

Proponents call it “supply-side economics”, detractors, the “trickle-down effect”. Semantics aside, this economic philosophy is the theory most consistent with America’s founding tenets of freedom of commerce, individual autonomy and noninvasive government. Supply-side economics has been effectively utilized in the past, under the stewardship of esteemed leaders such as Alexander Hamilton, John F. Kennedy and Ronald Reagan, in order to rescue the American economy from the brink of fiscal collapse. It is a theory rooted more in broad national values than in economic intricacies, allowing the American people, not the American government, to set commercial policy.

Free trade, low taxes and minimal commercial regulation are the foundations of the supply-side theory. By allowing Americans, both rich and poor, to keep a fair share of what they earn, we invite capital investment which, in turn, results in economic growth. With regard to individual income taxes, the lower the rate of taxation, the more money that is available for the buyer. This excess money will naturally be utilized to purchase a product or service, to invest in an upstart company or to be saved, with interest, in a bank account. With regard to business and corporate taxes, common sense dictates that a company’s profit margin serves as its driving incentive for investment, expansion and hiring. The more money the government takes, the less profit a business makes, the less profit a business makes, the less people it chooses to employ, the less people employed within a community, the less revenue that is raised through taxes. The government’s typical reaction to this diminishing revenue is yet another increase in taxes, causing more businesses to contract and raise prices, therefore perpetuating a vicious cycle.
Free trade and minimal commercial regulation, each serve the purpose of creating national wealth and increasing the real GDP. The greater the number of American products allowed to be sold abroad, the more money that will circulate within our economy at home, resulting in more domestic jobs and higher national wages. The same, too, can be said with regard to allowing foreign companies to operate within our borders. These companies will naturally employ additional American workers to tend to their business affairs, encouraging competition and demand.

The less operational control the U.S. government has over the affairs of American capitalism, the better off the economy will be. Big government is inefficient and clumsy by nature, private enterprise the engine of Americanism. New York State, with the highest top marginal personal and corporate tax rates in the nation, is in dire economic straits. However, even the states with less burdensome tax policies are no longer able to thrive. This is due to nearly four years of continuous congressional attacks on the American private sector, culminating in the passage of Obama-Care and the ill-conceived financial reform bill.

America’s current national debt dwarfs that of any other period in our history. We are in the midst of a trade war with Mexico as a result of union manipulations. The majority of the free world has negotiated trade agreements with Colombia and South Korea, yet America’s attempts at negotiations with these nations are languishing on Capitol Hill. January will usher in the largest business tax increases in American history via the expiration of the Bush-Era tax cuts and the newest round of Obama-Care levies. These policies, in a withering economy, are akin to those of the Nixon and Hoover Administrations, and will likely share their fate – that of making a bad economy worse.
The supply-side policies of the Kennedy and Reagan Administrations are the models that Americans should be attempting to emulate. In both instances, the leadership of the Presidents and the efforts of Congress resulted in rescuing the American economy from dismal conditions, leading to historically significant periods of economic growth. This growth, in both instances, resulted in increased government revenue, irrespective of lower tax rates. Presidents Kennedy and Reagan both held strong reverence for the ingenuity of the American people, each voluntarily transferring economic power from the government to the people, subsequently concentrating their respective resources on national defense, human rights and space exploration. These were issues that Presidents Kennedy and Reagan considered to be more in line with their constitutionally granted authority.

Supply-side economics is a proven theory that has resulted in the most fiscal prosperity for the maximum number of Americans. It is based on a quintessentially American premise. When a people are in control of their own destiny, they will, by nature, endeavor to improve it. Americans are prone to utilize that freedom in order to secure prosperity for subsequent generations; it is within our nature to do so. If a government controls its economy, it necessarily controls its people. Freedom of commerce is a liberty that Americans often take for granted; supply-side economics insures this liberty by keeping the government at arm’s length. If we allow our Congress to further impede upon our traditional commercial autonomy, sooner or later, supply-side economics will cease to be a viable option. Across the board tax cuts, free trade and commercial deregulation will merely be policies of the past. Countless generations of Americans will never have the opportunity to experience the prosperity that we once knew, and the American dream, as we presently know it, will serve as an historical footnote.

Jeremy Pitcoff

Mr. Pitcoff is a freelance columnist and a committeeman for the Smithtown Republican Party.  The VT welcomes perspectives from all Huntington residents. Click here for more about the rules and process for submitting an article or other media for publication.

Read our Comment Tips & Rules

29 comments to Huntington POV: Reagan, Kennedy & Supply-Side Economics

  • Anonymous

    Mr. Pitcoff.
    you said and I quote

    “Free trade and minimal commercial regulation, each serve the purpose of creating national wealth and increasing the real GDP. The greater the number of American products allowed to be sold abroad, the more money that will circulate within our economy at home, resulting in more domestic jobs and higher national wages. The same, too, can be said with regard to allowing foreign companies to operate within our borders. These companies will naturally employ additional American workers to tend to their business affairs, encouraging competition and demand.”

    We have foreign companies,they come into the U.S.,set up shop, and lie on forms they interviewed Americans for jobs and could not find suitable workers and therefore need to seek employees through our visa program. They bring in foreign workers and it only increases our population, lowers American wages, adds to our tax burden and serves us no benefit what so ever.

    I believe it is time to stop all immigration until we get a grasp on who is here now.

    What is strangle this nation is the federal reserve bank and the national debt created from interest on loans to our government.

    To free ourselves we need to end the federal reserve bank and create a non-debt monetary system. Watch the video

    http://www.imdb.com/video/wab/vi424280601/

    • charles manos

      The problem with immigration is the social safety net provided by the government. Prior to the 1920’s there was no free public education and there was no Social Security until the 1930’s. With these and other programs of today, a low wage worker consumes much more in services than he pays in taxes.

      Yes there are some bad actors, but the overwhelming majority of illegals are unskilled workers who would willingly work hard for less than the minimum wage in this country. And compared to their alternatives in Mexico or wherever, they would be improving their position in the world.

      If we want to create a manufacturing base in this country then perhaps we need a different category of citizenship for these people. They would receive very restricted social benefits, be exempt from minimum wage laws, have full civil liberties with respect to criminal law and have a pathway to full citizenship if they could demonstrate their economic worth to the US economy.

      • Jimmy

        Citizenship based on economic worth? This is America. We don’t do that here. That’s a marxist tenet. Seperated classes of citizenship is an extraordinary leap from what this country stands for as well..make someone a citizen, but not as good of a citizen as someone else. That doesn’t jive with the Declaration of Independence; not by a long shot. We’re Americans! Democrats like yourself, Repubs like me..we have to draw the line somewhere, dont we?

        • charles manos

          With respect to Civil Liberties I said they should have full rights.

          The issue with immigration is low wage workers having access to social services the value of which far exceeds the taxes they contribute. Those opponents of immigration complain about this all the time.

          BTW I’m not a democrat.

        • charles manos

          We have people in this country whose status with respect to citizenship varies already. There are green cards and HB1 work visas. I’m merely advocating another category.

  • Anonymous 2

    Mr. Pitcoff, your post is intelligent, well thought-out and quite informative. I completely agree with your viewpoints on deregulation, lower taxes and free trade. Protectionist measures never help the financial viability of a nation; all they can do is protect the interests of one industry at the expense of the rest (for the latest in protectionist news, take note of Mr. Obama’s tariffs on passenger vehicle and light truck tires from China- which have increased the costs of tires for U.S. consumers and have resulted in minimal-if any- growth in the U.S. tire industry).

    Let’s also not forget that Reagan and Volcker’s decision to increase the federal funds rate to 20% in June of 1981 curbed inflation, allowed the economy to correct from the malinvestment of the prior administration, and, with the help of lower taxes and supply-side policies, allowed the U.S. economy to reset and prosper.

    As to the post above, it is important to remember why companies have the incentive to lie on the forms you mention. It is because our government makes it more costly to hire American workers through burdensome taxes and crippling regulation. “Labor is as productive as the capital it employs, America has the most advanced capital in the world which means our labor should be the most efficient to hire… but it’s not thanks to taxes and regulation.” In essence, the culprit is our own government, and not immigrants.

    As to the Federal Reserve, I agree that it is the cause of many of the financial woes our country currently faces, and, that creature should be viewed with suspicion and audited so we may find out precisely where our money has gone and what government has done to our money.

  • charles manos

    Tax cuts worked under Kennedy and not under Reagan. Under Reagan Federal spending increased throughout his Presidency with the deficit tripling (stimulus spending?). The big economic driver during Reagan, which is overlooked, is the collapse of OPEC with oil prices going from $35.00 to $8.00 a barrel over those 8 years. That had a much larger monetary effect as well as an extremely positive effect on the trade deficit at the time.

    While I agree with you with respect to the negative effect of government on the economy and I do lean Republican. I have to be honest, with Republicans you do get legislation that undermines the free market by giving large corporations unfair advantages. I feel as a voter the choice is between Socialists (Democrats) or Crony Capitalists who are intolerant of non-conservative Christians (Republicans).

    Consequently divided government is clearly the best, or should I say the least worse choice between 2 corrupt ideologies.

    With respect to the distribution of taxes in this country, when you consider the totality of taxes paid by individuals at each wealth bracket, the rich pay a lower percentage of their total income (investment and earned incomes) than the middle class. The lower income brackets also pay a lower percentage than the middle class as well. The richest man in the country, Warren Buffett, has regularly remarked on this inequity with respect to his tax burden as a percentage of his total income being a lower percentage of income than his secretary pays!

    • Jimmy

      It’s a good thing Reagan got so lucky then; because of the dumb-luck of Ronald Reagan America was able to prosper for nearly 30 years and, all the while boasting the strongest military in the world to boot. It is an extremely astute observation to recognize that, Kennedy & Reagan, inating nearly identical economic policies, Kennedy’s worked but Reagan’s didn’t. Walter Mondale made a similar argument, from what I recall, in 1984. Too bad he wasn’t president, if he came in and raised taxes and restricted free trade, maybe our economy would have grown at a faster pace than under Reagan, which incidently, was the fastest it ever grew. I’m assuming Reagan was lucky about the Russia thing too right? Thank God, Gorbachev saved the world right?

      • charles manos

        Jimmy,

        If you want to criticize my points I have no problem with that, except you are criticizing things I’m not saying.

        Reagan played his part in ending the Cold War masterfully as did many of his predecessors. BTW, the end of the cold war had alot to do with an improving economy over many years. The point is, tax cuts don’t necessarily improve the economy and increase tax revenues.

        When the government cuts taxes without moving towards a more balanced budget the government winds up borrowing which drives up interest rates as there is more demand for borrowing.

        The point I’m making is the mantra of cutting taxes necessarily equating to an improving economy is not necessarily the case. Bush II cut taxes and we had a very tepid recovery.

        • Jimmy

          True enough. Tax cut will usually produce growth in a free market,as it did with Bush, but if they are coupled with arbitrary spending, as with Bush, there effect is neglegible. Bush was no supply-sider, however. Reagan and Kennedy were.

          • charles manos

            BTW you could add Calvin Coolidge to the list of tax cutters who simultaneously held a lid on spending. This led to the “Roaring 20s”.

        • Jimmy

          Good call…not a free-trader though

  • HS resident

    I agree with what you say here….”The less operational control the U.S. government has over the affairs of American capitalism, the better off the economy will be. Big government is inefficient and clumsy by nature, private enterprise is the engine of Americanism.” Please write to the democrat and republican Huntington Town Board members and tell them to vote YES for AVALON so that government gets out of the way of the plans of the private enterprise of Avalon who wants to make a $100 million dollar invest in HS!

  • To open I am a registered Republican and have been one since Ronald Reagan. Mr. Pitcoff articulates well the benefits of “Supply Side Economics” and I am a major supporter of this theory. The problem with this theory even back when Reagan was President was that the Congress was allowed to run up large deficits which at that time were considered large but by today’s standards they were mole hills compared to the mountain we live with today. I consider myself a Fiscal Conservative and do so because the Republican Party had the same control of the Legislative and Executive branches of government as the Democrats do now and they failed to curb spending and actually dug us deeper into a “Welfare State” mentality with the Prescription Drug Benefit legislation. Has the Republican Party returned to its Fiscal Conservative roots? That remains to be seen.

    I hope for a huge defeat of the Liberal Democrats this election season but if the Republicans do not display fiscal restraint we will have another 4 years of the Socialist in Chief Barack Obama. If and when the Republicans do take control of either or both houses of Congress the pressure will be on them not Obama to fix this economy. We know what we have with him. He is a Socialist and I dare say he wishes he could scream it proudly from a roof top. But rather then voice it he denies it and proceeds through his actions down the path of Socialism.

    These could be great times ahead of us but will the Republican Party display leadership? Will they stay fiscally firm and even more difficult for them fight the forces of political correctness which seemed to have historically had them look like deer staring into headlights.

    Supply Side and BOLD Leadership “YES!” Spending “NO!”

    Join the “Town of Huntington Voters Block” on Facebook. Vote John Gomez for Congress

    • HS resident

      You forgot to add SAY YES TO AVALON BAY!

      • Because he says No

        Kim, this is a conversation between people who have something useful to say. Please refrain from your Avalon Bay garbage.

      • Because he says No

        Also, Kim. You mention above that AB is agreeing to 25% affordable where they will make less profit. Do your research. That is a ploy AB uses in all their projects to get around local zoning laws. Think I don’t know what I am talking about? Believe me I do. When you do you Google search, start with the state of Connecticut.

        • HS resident

          will check it out…thanks.

        • HS resident

          What I found out that in CT (just like in the Town of Huntington) they too have a local law that calls for 20-30% of income restriced housing (also called affordable) so that any developer who comes in has to abide by this. Therefore, I dont see how it could be some sort of “ploy” that Avalon is using in the markets where they want to build.

          • It is a ploy....

            Good so far Kim. Yes Ct does have an affordable housing law, although it is no where near 30% and I believe below 20%, but could be wrong. It is not true to say that any developer has to abide by this. Once a town is deemed to have provided their quota, no more needs to be built. The quota is not per project, it is per township. So, Avalon builds developments in Stamford with NO affordable units because Stamford has already met their quota. But, they go into places like Stratford and demand a down zone so Avalon can build, and this is when they offer affordable units in the development. But Stratford does not want to down zone, they don’t want Avalon Bay. And Avalon Bay has kept Stratford in the courts for 10 years under the assertion that Stratford has not met their quota yet.Stratford is just one of many towns that Avalon has sued. Keep googling, you will find more.

  • Paul

    The problem with supply sude economics is best understood in it’s primary alias “the Trickle Down Theory”. That is because as free market capitalism has grown unchecked, only the slightest of dribbles today makes its way down from the the top 10 percent of the population who now control 93 percent of all the wealth in America.
    It doesn’t even take John Maynard Keynes to realize that it was a lack a intelligent, proactive, surgically applied government safeguards, that allowed the building of products(financial as well as bricks-n-mortar)which contain real value, to be replaced by derivatives (which are nothing more than shell games created calculus majors @ MIT). Along with laissez faire home lending policies that allowed people to buy homes who could barely pay their utility bills and encouraged qualified homeowners to treat the value in their homes as mad money, this was lead to the current recession. You know how bad the problem is when federal government cannot even mandate a food recall but must rely on “civic minded corporations” to voluntarily pull back their tainted eggs.The rights of citizens are guarenteed in the Constitution, NOT the corporate prospectus. Governmental protections and limitations, applied with specific purposes and intentions, are the check that balances the capitalism WITH democracy. Without which, the current financial fiascos will only happen again and again, again.

    • charles manos

      Paul,

      There was no laissez-faire capitalism behind the housing bubble. The exact opposite occurred. The government actively pursued a policy to, in the name of affordability, expand home ownership. The government was willing to provide loan guarantees to people who paid nothing down for their homes and if they couldn’t afford the closing costs, in certain cases the gov’t would pick these up. Fannie Mae and Freddie Mac have trillions of bad loans on their books because of this.

      When you flood the market with new buyers prices must rise. The banks were unwilling to underwrite nothing down loans without charging high fees and interest rates which is the prudent thing to do with debt obligations of lower quality. Under Clinton the gov’t viewed this as discriminatory as it affected a larger % of “minority” people. So the banks developed derivatives to offload their risk.

      To think that the housing bubble was not the direct result of gov’t policies motivated by “social and economic justice” is not merely bizarre, but betrays a political agenda that is Socialist down to the core.

  • charles manos

    I think this is the quintessential Ronald Reagan Speech…and relevant today. Whether you agree with him or not, clearly he is head and shoulders above anyone in the Republican Party today.

  • Reacting and responding will keep your body from a plateau.

    It does not care where you live, but it certainly does seem to thrive on the
    way you live. If you want extra support to write your
    goals in the STAR format just write an email to info@loseweighttowin.

  • I really do trust the many ideas you might have shown on your publish. They are pretty genuine and definately will undoubtedly operate. Nonetheless, a discussions are too rapid first of all. Might you want increase them a little via the next occasion? Was looking for publish.

Leave a Reply

 

 

 

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>