We’ve been inundated by recounts of the assassination of John F. Kennedy 50 years ago this week. There is nothing productive or of consequence that can come from continued musings over conspiracy theories, or retelling of the mythical Camelot that did not exist during the tragically truncated tenure of the 35th President. The most valuable thing that we can take from his incumbency is his political wisdom, which was copious.
Unlike many of his fellow alumni from Harvard, especially our current president, JFK understood economics. Shortly after he was sworn in, the President said, “Lower rates of taxation will stimulate economic activity and so raise the levels of personal and corporate income as to yield within a few years an increased — not a reduced — flow of revenues to the federal government.” He was the first supply-side president, and understood that the key to economic growth is to free up capital for private investment that creates jobs, makes and sells things, and increases the standard of living for the entire country. After all, he had history on his side, and it had worked for nearly 200 years.
“Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort — thereby aborting our recoveries and stifling our national growth rate,” he said.
And on another occasion, “It is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now… And the reason is that only full employment can balance the budget, and tax reduction can pave the way to that employment. The purpose of cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy, which can bring a budget surplus.”
JFKs tax cuts were passed posthumously in February, 1964. The result of those significant tax cuts, which still didn’t go as far as he wanted them to go, had dramatic effects on the economy. Real GDP grew at 5.8% in 1964, 6.5% in 1965, and 6.6% in 1966, while the unemployment rate declined from 5.2% in 1964 to 3.8% in 1966, falling all the way to 3.5% in 1969. And, as predicted by our first supply-side president, tax revenues increased dramatically, from $94 billion in 1961 to $153 billion in 1968.
He not only understood real-world economics, but he understood the proper role of government in a free society, as America was founded to be. He said to the New York Economic Club in December, the year before he died, “The federal government’s most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures.”
In other words, foster a climate that is conducive to economic growth, rather than creating government programs – expenditures, as he referred to them – which siphon the lifeblood out of a free economy. JFK was a Reaganite, economically speaking, before Reaganites even existed.
There are far too few Republicans that believe that today, and I would venture to say, there are no Democrats who believe that today. Too many of today’s politicians are statists, convinced that the government’s role is, rather than foster an environment that is conducive to economic growth, function as parasites or leaches, sucking as much capital and monetary velocity out of the economy as possible to pay for our alphabet soup acronyms of government programs and agencies.
Our nation would be so different today if presidents 36-44 all believed like JFK and Reagan did. We wouldn’t be struggling under an insurmountable $18 trillion in debt, more than half of which came in the last five years. We wouldn’t be witnessing the meltdown of our health insurance and health care delivery, with as many as 93 million Americans (the administration’s own estimate), losing their health care.
We wouldn’t have an omnipresent government that gathers our financial information, health care information, monitors our phone calls, and even spies on our social media activity. We wouldn’t have a government that tries to tax the very gas that we exhale, with the distorted and fabricated justification that it will “save the earth,” as well as regulation on anything and everything that works, moves, or produces anything.
John Fitzgerald Kennedy was the last Democrat president that properly understood the role of government, and the quality of life assured to all from a free market economy that wasn’t taxed and regulated to death. As a matter of fact, our 35th President was committed to a balanced budget, loved the Constitution, loved his country, was against “big government,” was an NRA member, anti-communist, pro-life, and in spite of his challenged morality, was a deeply religious man. By today’s politico-ideological spectrum standards, JFK would be a Tea Party patriot.
This is manifest even more clearly by one of his Independence Day speeches, where he said, “Conceived in Grecian thought, strengthened by Christian morality, and stamped indelibly into American political philosophy, the right of the individual against the State is the keystone of our Constitution. Each man is free.”
And contrary to the Washington Post’s bizarre claim this week, JFKs assassin was a communist, not someone who would sympathize with the Tea Party of today.
Based on his own words and convictions, I think it’s safe to say that JFK would be appalled by how much our nation has degenerated from what it was intended to be, and his vision of what it should be.
Associated Press award winning columnist Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, Idaho and is a graduate of Idaho State University with degrees in Political Science and History and coursework completed toward a Master’s in Public Administration. He can be reached at [email protected].Wake up Right! Subscribe to our Morning Briefing and get the news delivered to your inbox before breakfast!