Hello, folks. Welcome to Kudlow. I'm Larry Kudlow.
Less than a day until the New Hampshire primary
looks like it's all over but the shouting
now in New Hampshire. Donald Trump's putting together a unified
Republican Party and sticking to his Iowa theme that he
can unify the country with successful policies on the economy,
border culture, foreign affairs and breaking news.
There's a unity rally tonight with Tim Scott,
Vivek Ramaswamy, Governor Doug Burgum,
and that's with President Trump at 9:00 PM in Laconia,
NH. We will have a live report from there
in just a moment. And then Senator Marsha
Blacksburn's going to react to all that.
But first, before we go to New Hampshire,
I just want to get something off my chest and
talk about a very bad idea,
something called a fiscal Commission coming out of Washington,
DC For some reason, Republicans like Texas Congressman Jody Arrington,
head of the Budget Committee,
been pushing to get this through a fiscal Commission.
Terrible. It's a tax trap.
We've had these goofy commissions down through the years,
Paul Ryan shared one that would have raised taxes and
damaged the economy.
Then there was Simpson Bowles.
It was never implemented, but would have raised taxes significantly
and damaged the economy.
Going way back, President George HW Bush agreed to a
tax hike in the
1990 budget summit that probably cost him the election in
92. The Congressional Budget Office projected that the tax hikes
would yield
159 billion of new revenue then,
but they lost 206 billion from economic damage inflicted by
the higher taxes.
So the net loss of
47 billion didn't help the deficit at all.
Bill Clinton raised taxes in 93,
but the CBO estimate later showed the weaker economy lost
virtually all the projected revenue increase.
And Barack Obama? He raised taxes in 2010 and 2013,
and then later, CBO showed a nearly 4 trillion revenue
loss because of a falling economy didn't help the deficit
at all.
Clinton wised up in 96 and 97.
We cut taxes, reformed welfare
and the deficit disappeared for four years with a massive
growth gain of about
4 1/2% per year. Hat tipped a former Texas House
member and Banking Chairman Jeb Hensarling for his excellent op-ed
piece on this subject last week in the Wall Street
Journal. The best way to avert a crisis is to
reform entitlements.
The next best way is growth.
The trouble with these so-called bipartisan commissions is that they
start raising taxes at the very first meeting,
even before the first cup of coffee has been poured.
Whether it was JFK in the 60s,
however, Reagan in the 80s,
Clinton in his second term,
or Donald Trump, lower taxes have always been a successful
policy to boost economic growth
and more growth. With more people working with higher wages,
well, that generates more tax revenues to reduce deficits,
probably by a factor of at least two or three
to one.
That's the historical evidence. So Republicans now should not be
lulled into falling for yet another phony fiscal Commission.
Better to get President Trump a strong Republican,
Senate and House so that the fiscal committees can do
their job rather than rely on left wing Democrats.
And finally, any moves to strengthen Social Security should focus
on market based investment choice.
Just like the Federal Thrift Savings Plan,
Social Security participants should have the option of purchasing approved
stock or bond indexes that,
over the long run, will yield far higher returns and
create more wealth than the current system,
which invests only in T-bills.
And just like private retirement accounts,
Social Security should create more wealth for more people over
the long run.
Cutting benefits or raising taxes from another fiscal Commission would
be nothing more than fiscal insanity.
Americans for Tax Reform Governor Norquist going to be here
later in the show
to give us his perspective on why this is a
terrible idea?
All right.