We Want Ours
Wesbury, Brian S.
Fat Forecast BY BRIAN S. WESBURY n 1992, Robert Bartley's book, I The Seven Fat Years and How To Do It Again, described America's stunningly successful metamorphosis—economically and...
...The war to liberate Iraq, by definition, will create more global freedom too...
...A demand-side tax rebate and a compromised phase-in of the first tax cut, plus tariffs on steel and faster growth in government spending, showed that the Bush team went off track in its first two years...
...If today's headlines sound like déja vu, it's because the world looks like 1982 all over again...
...To the annals of arrogant irresponsibility—along with...
...While the parallels are not perfect, America today is living through a similar set of circumstances...
...And when investors see these successes, the value of U.S...
...No matter how deep and serious the pessimism, as long as President Bush stays the course, fat years remain the forecast...
...military the most formidable in the world, and the first volley of Tomahawk missiles nearly killed Saddam Hussein...
...Europeans and assorted celebrities thought him a warmonger...
...the Soviets called Reagan "dangerous...
...What is important is not the details of the 1980s, but the major themes...
...While war is never pretty, and brave U.S...
...Rather than debate the Reagan era again, anyone interested should read Bob's great book...
...The delay in decision making and investment is holding U.S...
...Encouraged—ironically—by still-rising productivity, companies across America are on "maintenance budgets," with decisions about future growth being put off to focus on cost cutting...
...then some leverage in the Congressional Conference might have the total up to $500 billion,$600 billion tops...
...To make matters worse, real GDP in 1982 fell more than it had in any year since the Great Depression, and the stock market was down for seventeen years...
...THE TIDE IS TURNING T his move toward greater freedom has taken time to gather momentum...
...Some see depression and deflation on the horizon...
...The Bush administration is on a roll...
...growth well below the 4 percent a year needed to create net new jobs...
...Despite the hype of rising deficits, the Investor Class is still calling the shots...
...The economy has also been held back by uncertainty over UN diplomacy that seemed to drag on forever...
...Tax cuts are a move toward more freedom for U.S...
...DEEP PESSIMISM In 1982, thirty-one commercial airliners were hijacked worldwide, five of them in the States...
...That revolution is now paying dividends in ways even Reagan probably did not imagine...
...Nonetheless, terrorist alerts, a lack of job growth, and a very weak stock market are fueling deep and serious pessimism...
...The White House feared a Senate bill that would have carved out just $350 billion for tax cuts...
...Protests occurred frequently...
...Now the final total will likely end up north of $650 billion, which will allow the most important pieces of the Bush package—acceleration of all tax cuts and 100 percent dividend exclusion—to pass as proposed...
...Instead, the Senate beat back John McCain-2003's version of Bob Dole—and passed a budget that included at least $626 billion in tax cuts...
...The future is never known until it becomes the present, but principled policies of strength and freedom had a tremendous impact on the world in the 1980s...
...Important pieces of the tax-cut package would have had to be dropped...
...servicemen and women have already died, the only serious question about victory in Iraq is how long it will take...
...These same high-tech advancements attract capital from around the world and continue to push productivity up as well...
...On the domestic front, the third stage of the Reagan tax cut was scheduled for January 1, 1983, but was contested by moderate Republicans—one of them Senator Bob Dole—and by Democrats who thought deficits were a danger...
...The president wanted to put Pershing II missiles in Germany, and he called the USSR an "evil empire...
...I would add that without Reagan the high-tech revolution never would have occurred, at least not in the United States...
...assets will rise...
...Still others suggest that George Bush's federal budget deficits will drive up interest rates and bog down the economy for decades...
...The Senate initially was a different story...
...Those are the same arguments that were so wrong in the 1980s, and as history repeats they will be wrong once again...
...Ronald Reagan had a very limited agenda when he came to Washington...
...action in Iraq will create more terrorism, not less...
...Those mistakes helped mire the economy and hurt financial markets...
...others suggest that a "malaise" like that of Japan is more likely...
...They will again in the twenty-first century...
...FATTENING UP As Cypress Semiconductor chairman and CEO T. J. Rogers said, "Reagan was the inspirational leader of the technological revolution...
...Some argue that U.S...
...However, the tide has begun to turn in a spectacular way...
...The more success that it has in Iraq, the greater ease it will have passing its domestic agenda...
...Anything that moves the world toward more freedom is good for economic activity...
...Repair the economy by getting the government off people's backs, make our military strong, and defeat the Communist enemies of freedom...
...Eds: Also read our interview with him, starting on p. 32...
...Fat Forecast BY BRIAN S. WESBURY n 1992, Robert Bartley's book, I The Seven Fat Years and How To Do It Again, described America's stunningly successful metamorphosis—economically and militarily—from the sickly seventies to the exuberant eighties...
...And just as the shooting in Iraq began, back in Washington the House passed a 2003 budget that sets aside $726 billion for tax cuts—the full amount requested by the president...
...The Investor Class will then reward the president with more support, leading to a virtuous circle of positive developments...
...High-tech systems have made the U.S...
...entrepreneurs...
...Today, the United States is the sole "hyperpower...
...What we need is a tax cut, to make America fat and happy again...
...He is fighting the global threat of terrorism, and while the economy is in much better shape today, it is still lean...
...The Cold War was still tense and so-called experts—including economist Lester Thurow, today still bravely opining—thought that the USSR's economy was equal to that of the United States...
...and its economy is growing, albeit slowly...
...Sound familiar yet...
...President George W. Bush faces the same challenges Ronald Reagan did, but he also has the same opportunities...
Vol. 36 • March 2003 • No. 2
