Malcolm Cutchins: Many positives found in today’s economy, Toomey said so

There is much more in this “Greatest Story Never Told” that began in this column last week. In contrast to all the gloom and doom we could choose to dominate our attitudes, I (and many readers, I suspect) prefer to let the positive things dominate. In that vein, let’s continue with highlights of a speech given by Harvard graduate Patrick Toomey that was printed in the newsletter, Imprimus.

Two specific items that I couldn’t fit into my word allocation last week were:

1) “Technology has become accessible to all sectors of society,” for example “in 1985 there were 2.1 million personal computers, and 243 million in 2007; 340 cell phone subscribers in 1985, and 243 million in 2007.”

2) “Health indicators track similarly. Infant mortality dropped from 20 deaths per 1,000 people in 1970 to seven deaths per 1,000 in 2002. In 1980, American life expectancy was less than 74 years. Today it is 78.”

Much has been written about “helping the poor” in both our country and in the world – and there are some good ways to do that. (Probably the worst way is through forced taxation.) Toomey notes, “A recent issue of The Economist documents the tremendous worldwide improvement in both the social conditions in poor countries and the alleviation of poverty.”

Other countries have followed the lead of the U.S. in terms of prosperity and growth such that, (between 1999 and 2004), “some 135 million people emerged from destitution, and there are now twice as many countries with fast-growing economies as there were in 1980.”

Toomey continues, “This long period of sustained economic growth and the huge quality-of-life improvements it made possible didn’t happen by accident. They were a result of a major expansion in economic freedom, initially in the U.S., then increasingly around the world. This expansion took many forms, but three of the most important were a dramatic reduction in tax rates, a series of major deregulations, and a broad expansion of trade.”

“President Reagan signed the Economic Recovery Tax Act of 1981. The top rate was reduced from70 to 50 percent, and by the time Reagan left office, it was down to 28 percent. During Reagan’s two terms, the top corporate tax rate was reduced from 34 percent to 28 percent.”

Although there have been some tax increases, “the top tax rates that preceded Reagan were gone. Nor have they come back – at least not yet. In subsequent years, President Bush the elder and President Clinton raised some taxes too much, but lowered others.” (We can thank Clinton for having to pay taxes on up to 85 percent of Social Security income.)

“The current President Bush has lowered taxes … very effectively in 2003” (lower tax rates, phase out of the death tax, marriage penalty relief, and lower taxes on capital gains and dividends).

A new issue of Hoover Digest has an article by John Cogan and Glenn Hubbard with the subtitle, “Disrupting our economy while leaving the deficit virtually untouched? Not a good idea.”

The authors note, “Federal revenues are already high, yet we stand on the verge of a very large tax increase if the Bush tax cuts expire. The personal income tax burden would rise to its highest point in history; relative to GDP … Meanwhile, the lure of higher revenues would sustain Congress’s wasteful ways.”

Dr. Malcolm Cutchins is an emeritus professor of engineering of Auburn University and writes a column for the Opelika-Auburn News.