Last Updated:November 27 @ 07:17 pm

Kudlow: Paul Ryan - Pro-growth Supply-Sider

By Lawrence Kudlow

In the two weeks since Mitt Romney chose Paul Ryan as his running mate, the entire Republican Party has been rejuvenated. Gov. Romney  himself  has been re-energized. After losing ground in the polls this summer, he's once again drawn even with the president. Wisconsin is now in play. Even senior voters in Florida have signaled heavy approval of Romney-Ryan.

I know vice presidents are not supposed to be so influential. Political scientists say the top of the ticket is what matters. But Ryan is disproving that.

And yet I hear and read some grousing from conservative supply-side colleagues that Ryan is no longer the Jack Kemp, supply-side-growth guy he once was. Instead, they say he has become a root-canal Republican who obsesses about entitlement debt bombs and deficit reduction. They say he's wedded to the Congressional Budget Office in a kind of budget-austerity, Stockholm syndrome.

The whisperers say this happened to Dave Stockman years ago at the Office of Management and Budget. Now they say it's happening to Ryan at the head of the House Budget Committee.

These charges are completely false.

On the eve of the convention, I had a lengthy interview with Ryan. Over and over, he talked about the need for economic growth through supply-side tax reform, spending restraint, deregulation and entitlement fixes.

Previewing his convention speech, Ryan said, "We have to show the country that we have a pro-growth plan to get people back to work, to get this economy growing again." He said, "We want to get back to the American idea (of an) opportunity society with a safety net; (a) society of growth, opportunity, of upward mobility."

This is Ronald Reagan. This is Kemp. This is growth, not root canal.

The congressman said Team Romney, with a 20 percent across-the-board tax cut, is aiming at an average growth rate of 4 percent over the next four years. "If we can do that," he said, "which we think we can with the right economic-pro-growth policies, we can get 12 million people back to work."

Ryan opposes crony capitalism and corporate welfare. He wants Washington out of the game of picking winners and losers. He argues that if President Obama raises the top tax rate on small businesses to over 40 percent, it would kill growth and jobs. He argues in supply-side fashion that lowering tax rates and plugging loopholes will produce  more  income, not less.

At one point in the interview, Ryan summarized the Romney-Ryan position: "Pro-growth policies, energy policy, regulatory reform, tax reform and spending cuts." As I have said before, I believe the Mitt Romney platform is the most conservative Republican policy since the Reagan era. Paul Ryan bolsters it.

Ryan also said this: "Let's get the size of government back down to where it has historically been: 20 percent of GDP by 2016." In other words, significant spending restraint. This is pro-growth, too.

Supply-side mentor Art Laffer has been arguing for years that lower spending as a share of gross domestic product is essentially a tax cut to grow the economy. In fact, with a 20 percent reduction in marginal tax rates, and significant spending restraints, it's the most powerful economic-recovery tonic possible. And let's add to that: The Romney-Ryan plan will slash the corporate tax rate from 35 to 25 percent -- a  monumental  growth measure.

Depending on how fast the spending comes down, I calculate that Romney could lower the spending baseline by as much $1 trillion in his first term. This, along with economic-growth incentives and upper-bracket loophole-closers, will pay for supply-side tax cuts  without  raising taxes on the middle class. In fact, this tax reform will drop middle-class tax rates near 12 to 20 percent -- a significant reduction from current law.

This comprehensive view of growth incentives and deep spending cuts completely counters the false liberal argument that somehow middle-class taxes have to go up. With a  comprehensive  growth plan, middle-class taxes go  down.

Ryan expressed dismay at the latest CBO recession forecast concerning a possible rollback of the Bush-era tax cuts. But he said the first order of business for the Romney administration will be to fix the tax cliff and avoid another recession, which would be devastating to America's psyche.

Finally, Ryan summarized his monetary strategy in two words: sound money. He said, "We want to pursue a sound-money strategy so that we can get back the King Dollar, as you say it, Larry." Indeed, the Republican platform committee, hopefully with Romney's backing, is including a gold-commission study that would put much-needed discipline into Fed policy.

So let me say this to my skeptical supply-side friends: I don't see one whiff of evidence that Paul Ryan has departed the pro-growth model. Flatter-tax reform, spending restraint, deregulation, bolstering entitlements -- this is all from an updated Reagan-Kemp playbook.

And it's a playbook that's going to win another big election.

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To find out more about Lawrence Kudlow and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

COPYRIGHT 2012 CREATORS.COM

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5 Comments

  1. inluminatuoComment by inluminatuo
    August 27, 2012 @ 8:53 am

    If Romney and Ryan accomplish anything to stop Obama’s assault on our ability to extract our own American energy from the ground and turn out cost of gasoline from $3.76/gallon today back to the $1.89/gallon it was when Obama took office,,,,it would save Average Americans a $725/yr to each American family who burns 20 gallons/wk to go to work, and much, much more for those who pay $5.00/gallon in Chicago. Multiply these savings by 154,731,000 in the civilian workforce you save Americans $112 billion dollars that do not go into foreign Muslim economies but stay home and build American wealth and jobs, and fund government social programs. Think of all the jobs created with the Keystone pipeline and the re-invigoration of the gulf states and the traditional American oil patch as well.

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    • downdraftComment by downdraft
      August 27, 2012 @ 1:13 pm

      inluminatuo…what happens if Obimbo furnishes fuel the fuel reserve and lowers the price of gasoline to the level it was in 2008?…just to get voters off that issue…

      …and he will these last few months before the election…my guess the plan has been written and awaits his OK.

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  2. hank1931Comment by hank1931
    August 27, 2012 @ 11:13 am

    Even if/when Romney/Ryan take over the WH, it will take well into 2013-14 before much positive outcome will happen for
    gas to drop under $3.00.
    But more important is for them to get unemployment down considerably — I believe the actual number is 13%+ and not
    what the government figures tell us @8.5% — very skewed report.

    Also, the get the medical coverage better understood by the elderly, they have to make it more clear why Obama’s plan is a bad plan — the elderly’s greatest concern is health and R&R have to lay out a simple, better coverage plan.

    Also, R&R must hit harder about the wasteful $$$ spending by Obama on projects that do nothing good for the USA.

    I like the way things seem to be getting more positive for the Rep’s.

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  3. inluminatuoComment by inluminatuo
    August 27, 2012 @ 2:00 pm

    Looks like two liberal trolls came in around 11:00 am and one star hammered everyone. Paid Democrat operatives,,,,Yes real unemployment when considering those who are under employed and those who have just given up looking for work is 15-16% and if the government kept statistics like they did in the 1930′s we would realize we are in a depression, not recession.

    Whatever Obama seeks to save the middle class in tax cuts he steals double back in higher gasoline costs and Generational medicare theft of $715 billion from the elderly in medicare money re-distributed to Obamacare, for use by his voting bought slackers who are healthy and young and strong enough to work and buy insurance, but like true liberals themselves who earn and produce nothing, have already re-distributed their own small earned dollars into tobacco, alchohol and drugs,,,,which if they got off of would not need to steal elderly healthcare dollars for themselves who would then be healthy.

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  4. JDZComment by JDZ
    August 27, 2012 @ 2:44 pm

    In California, the state has a 65 cent tax on a gallon of gas and why gasoline in California is much higher then most states. California is almost a lost cause no matter who gets elected. There was an interesting article last week in one of the CA newspapers about the CTA (California Teachers Association) which is the largest public service union in California. This union considers themselves the 4th leg of the state government and basically controls who gets nominated and elected into public office in California with all significant elected and appointed officials being Democrats, which is under the control of the CTA. This union contributed 47 million dollars to elect Jerry Brown back in as Governor.

    I know that this article is about cutting the cost of government, realizing national energy independence, and cutting taxes, but, one of our problems in turning around our economy and unleashing the private sector to create new jobs starts at the state and local levels. California is the poster child of how to kill the golden goose in a state that once was almost a country in itself with the 7th largest GNP in the world with enough resources and industry to be totally self sufficient. Now, it has the highest tax and fee structure of all of the states, the most complex set of government regulations on every business in the state, the most suppressive set of environmental regulations, one of the worst performing public educational systems, a totally over-whelmed infrastructure that is having trouble handling the millions of illegals in the state, and the most expanded set of social justice government subsidy programs in the country. And, the largest and fastest growing set of financial liabilities of all states.

    When Romney becomes President, what can he possibly do at the state level (like California) to get the economy jacked up out here to create jobs? The states that have Republican Governors and are “right to work” states are closer to being on the same economic strategy page as Romney, but a state like California is not even close and will take taxpayer handouts of course, but, under the CTA controlled liberal government, are not going to change their failing policies.

    I did hear Romney say that in order to get our failing public education turned around, that something has to be done about the union control of the system, but it is bigger then just education, as we have seen in Wisconsin. The public service unions have way too much control of the political process in our government at all levels and you can bet that they are doing everything they can to re-elect Obama because they have been in bed with him from the “get go” and are providing the Obama campaign with thousands of free ground troops to help him get re-elected.

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