Sharing the Poverty

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Is America’s nirvana ending soon? It is, if you believe the contents of a new book: The End of Prosperity: How Higher Taxes Will Doom the Economy—If We Let It Happen.

Arthur Laffer, Stephen Moore and Peter Tanous; each of them keen students of Reaganomics and still involved in America’s corporate world and academia, discuss in their book the importance of continuing the pro-growth economic policies of the 1980s.

A statement from the American Enterprise Institute ahead of the launch said: “The authors explain how effective economic policies instituted over the last twenty-five years have created jobs and fostered impressive economic growth. They also warn that the future of American tax policy is uncertain due to the coming election and the impending expiration of the Bush tax cuts and that high-tax policies could undermine this widespread prosperity.”

Laurence Kotlikoff of Boston University and the National Bureau of Economic Research told an audience at AEI that Democrats should recognize the gravity of issues raised in the book in light of current events.

“After a long campaign season of spin, smear and slogan, we’re finally having a serious debate over domestic policy. President Bush has set the agenda—Social Security’s privatization and tax reform. The President wants to cut Social Security’s payroll tax and have workers invest their tax cut in stocks and bonds within private accounts. And he wants to replace the federal income tax with a tax on consumption,” he said.

He continued: “Both proposals drive Democrats nuts. In their view, Social Security and the income tax are the only things keeping the elderly out of the poorhouse and the rich from gaining all the spoils. But Social Security is broke, and the income tax is a mess. So the Democrats must engage and stop treating these institutions like sacred cows.”

Robert Shapiro, a former Undersecretary of Commerce for Economic Affairs in the Clinton administration, said the biggest challenge of globalization as currently facing America is not trade.

“It’s reining in health care and energy costs—and preparing American workers and businesses to compete,” he said.

And he added: “Globalization poses the most daunting challenges any president has faced since the Great Depression. While universal health care coverage is a social goal beyond debate, the roots of the problem lie in decades of fast-rising costs.”

Jesse Masai is an intern at the American Journalism Center, a training program run by Accuracy in Media and Accuracy in Academia.