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JFK’s approach to grow the economy and create jobs

President Obama should amend his current Jobs Act by heeding the advice of former Democratic President John F. Kennedy to grow the economy and create jobs.

From JFK’s State of the Union Address, January 14, 1963

“If we are to prevail in the long run, we must expand the long-run strength of our economy. We must move along the path to a higher rate of growth and full employment.

For this would mean tens of billions of dollars more each year in production, profits, wages, and public revenues. It would mean an end to the persistent slack which has kept our unemployment at or above five percent for 61 out of the past 62 months—and an end to the growing pressures for such restrictive measures as the 35-hour week, which alone could increase hourly labor costs by as much as 14 percent, start a new wage-price spiral of inflation, and undercut our efforts to compete with other nations.

To achieve these greater gains, one step, above all, is essential—the enactment this year of a substantial reduction and revision in Federal income taxes. . . . [A] net reduction in tax liabilities . . . will increase the purchasing power of American families and business enterprises in every tax bracket, with greatest increase going to our low-income consumers. It will, in addition, encourage the initiative and risk-taking on which our free system depends—induce more investment, production, and capacity use—help provide the two million new jobs we need every year—and reinforce the American principle of additional reward for additional effort.”

President Obama, with the current unemployment at 9.1% and the underemployed as measured by Gallup for September, 2011 at 18.3%, this is the Jobs Act your country needs!

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13 Comments

  1. Ted: I thought you were a deficit hawk. You can’t embrace JFK’s tax-cutting policies and continue to argue that deficits should be a top priority.

    You see, JFK was a Keynesian, not a supply-sider. Most congressional Republicans voted against the Kennedy tax cuts, which they considered inflationary budget-busters. They were worried about deficits.

    Read this:

    “Kennedy’s economic policies were rooted in a Keynesian belief in the stimulative effects of budget deficits. While FDR and his aides had embraced countercyclical deficits as necessary in times of recession or depression, Kennedy was the first to advocate planned deficits in a time of neither war nor economic emergency. The aim was for the tax cuts to stimulate demand, driving the economy from the bottom up.

    “Republicans, by contrast, argued that while tax cuts were desirable, running an $11 billion deficit, “with no hope of a balanced budget for the foreseeable future, is both morally and fiscally wrong.” That balanced-budget fixation was the ruling GOP philosophy until the rise of supply-side economics, which saw tax cuts as a way to boost investment (the supply side versus the Keynesian demand side) by helping the wealthy and business. Deficits were handled with the magical declaration that tax cuts pay for themselves.”

    The whole article is here:
    http://www.usnews.com/opinion/articles/2011/01/26/the-myth-of-jfk-as-supply-side-tax-cutter

    And then there’s this argument:

    “Offsetting tax cuts with corresponding cuts in government spending, would, according to Keynes’ theory, be self defeating in that the object was to encourage spending by consumers. Further, to be effective, Keynesian tax cuts had to be directed toward the lower income brackets since these brackets contained the people with the lower incomes. The lower a household’s income, the more of that income the household has to spend to survive. Wealthy people, on the other hand, can afford to save large portions of their income because their incomes are more than enough to meet life’s needs….

    “When President Kennedy called for cutting taxes during the 1960 election it was a Keynesian style tax cut that he was proposing. The Republicans immediately went into opposition for two reasons. First, the proposal was inflationary (which is exactly what Keynes prescribed for pulling an economy out of a recession) and, second, it would generate a deficit thereby threatening to add to the national debt.”

    The whole article is here: http://chuck.hubpages.com/hub/Democrat_vs_Republican_Tax_Cuts_

  2. Well, almost a year earlier on Jan 12 ,1962, JFK signed Executive Order 10988 which gave federal employees the right to limited collective bargaining. This of course set the stage for out of control wages and benefits for public sector unions that the Feds still have no idea how to pay for it all.

    The point is JFK was no financial genius.

    Further, while I agree the JFK tax cuts, the Reagan tax cuts, and most of the Bush tax cuts are all good things, we do have this $15 trillion debt problem. Democrats want to increase taxes on millionaires. I’m weary of such proposals, but they are not outlandish. Former Fed Reserve Chiefs Volker and Greenspan, in addition to Bernanke, think its a good idea.

    There is no question we have a spending problem more than an revenue problem in this country. However, if we can balance the budget with 90% spending cuts and 10% tax hikes on the rich, I say we go for it. Unfortunately, most Republicans in Congress think any such discussion or ideas is a “non-starter” which is completely asinine.

    I don’t care if its a 5% tax hike on millionaires, or elimination tax deductions for certain wealthy people, or an increase in capital gains tax on millionaires, something needs to be done to balance the budget.

    If Republicans win back the Senate and White House next year, perhaps they can push massive tax/spending/entitlement reforms through Senate reconciliation similar to the way they did Bush tax cuts and Dems did with Obamacare, but without tax increases. But if Republicans fail in either of these areas, they need to work with Democrats for a solution, and not stall until 2016. I’m tired of waiting.

  3. Steve Noll

    Ted. I’m shocked! Are you starting to see the light?

  4. “Democrats try so hard to hide their supply-side tax cutter.”
    http://old.nationalreview.com/nrof_bartlett/bartlett200401280907.asp

    “It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now … Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.”

    President John F. Kennedy, in a December 1962 speech to the Economic Club of New York

    “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.”

    John F. Kennedy, Jan. 17, 1963, annual budget message to the Congress, fiscal year 1964

    http://www.nationalcenter.org/JFKTaxes1961.html

    Pat also claims the Republicans are solely responsible for the Postal Service budget problem (H.R. 6407). He fails as he often does to mention that two Democrats were cosponsors of the measure and that it was passed unanimously by the Senate. Danny Davis [D-IL7], Henry Waxman [D-CA30]
    Dec 9, 2006: This bill passed in the Senate by Unanimous Consent. A record of each senator’s position was not kept.

  5. Aren’t you forgetting something, Pat? Like the fact that the deficits in the early 1960s were miniscule compared to what we are running today. Here are the deficits for those years as a percentage of GDP:

    1961- 0.65
    1962-1.22
    1963-0.77
    1964-0.89

    The data can be found here:

    http://www.usgovernmentspending.com/spending_chart_1950_2011USp_12s1li011mcn_G0f

    For perspective, 1.22% of GDP today is about $180 billion. Comparing that to the amounts we are currently running is a bit absurd.
    Are you suggesting that we bring the deficit down to $180 billion? I didn’t think so.

  6. So further tax cuts will save us, Ted?

    You aren’t taking into consideration the scare tactics of the past three years used on the American People as a part of your formula. The middle class (the few that are left) and the wealthy will save most of what you give in tax cuts. The poor will spend it. Since the poor won’t get a heck of a lot you won’t see much in the way of stimulation to the economy. What they buy like food, etc., won’t grow jobs, just a few bottom lines.

    You are talking politics which doesn’t understand more then the immediate quick fix looking thing until the next quartly figures come out. Most importantly, you’ve failed to show the ability to work together to build the confidence that would be needed to get people to spend those tax cuts to help accomplish stimulating the economy.

    When you speak about Kennedy or Reagan, you are talking about excellent speech makers who made people confident, so they spent money. They weren’t about dividing people, but uniting them.

    May I suggest the next time you are tempted to use the term “class warfare,” you recall that’s not very uniting or useful in terms of asking people to spend their money. You’ve made government a nasty word, so you can’t use it now as a solution and expect to be trusted. Divide and conquer worked well before the age of electronics. Now all you have for many years to come is division which will take a very long time to heal.

    Telling people daily they didn’t need government was a big mistake. If you give me money, I’m going out for one nice lunch at the Red Robbin (love those quac/bacon burgers!) and then trying my best to save the rest because I can’t be sure what my own government will decide I don’t need and I’ve got to cover those costs myself with that money you just gave me. I may not be able to buy flood insurance any longer, or my deductable on Medicare may double, or my property tax leap because the Fed no longer has grants for us, etc etc etc…

    Kenndy stood toe to toe in the Cuban Missel Crisis and didn’t blink. People didn’t demonstate on Wall Street or any street about it. And when he accepted the blame for the Cuba invasion when it failed, they stood with him. So in success and failure, like him or not, people still trusted their government was standing.

    No trust and they save the money. The current ad we all see running on TV with the senior hanging on to a bunch of baloons popping and being told in January doctors won’t want Medicare patients is an excellent example of what I’m telling you. It clearly shouts, SAVE your money, don’t spend if you need doctors visits. Getting old means you need doctors visits, Ted.

    • Ted Biondo

      Carol, people didn’t just trust Kennedy, what he did was working. What Obama is doing is not working. Kennedy was not trying to change our form of government, Obama is. I give Kennedy a lot of credit in the Cuban Missle crisis – he made the right call, but he also had the Cuban Bay of Pigs. Facts win, not promises, not wishes or demands – just hard work to be the best that you can be and you will be surprised how much help will be at your disposal.

      Unless there is a true issue to remedy – like civil rights for all, demonstrations are usually not successful – especially if the participants can’t even agree on as to why they are participating. The government doesn’t provide an even playing field unless there is an uneven one. These people feel they are entitled to take what others have earned. Demonstrate in Washington, not New York.

      Doctors don’t want Medicare patients and especially Medicaid patients because the government, state and Federal don’t pay their bills. Are the doctors supposed to work for nothing? Believe me, I have spent my fair share with doctors – I know what you mean.

      Bottom line – the government has no money except that it takes from the people. So for the government to give something to one group, they have to take it from another – is that a free society. People should want to help those less fortunate in a free society. We will lose everything if we allow the government to determine what is the level playing field because all decisions will be made by those who shout the loudest, not those truly in need!

  7. One other thought: Had JFK supported the Cubans in their attempt to overthrow Castro (the Bay of Pigs), the Cuban Missile Crisis may never have occurred. Can credit really be given for dealing with a problem that he helped create?

    We need to make it easier for businesses to be created, or expand, by streamlining the morass of bureaucratic red tape. This will also cut costs for both business and government.

    However, can you tell me what Obama policies like this will do to our fragile economy?

    •EPA Regulations Will Close At Least 28 GW of Generating Capacity
    EPA modeling and power-plant operator announcements show that EPA regulations will close at least 28 gigawatts (GW) of American generating capacity, the equivalent of closing every power plant in the state of North Carolina or Indiana. Also, 28 GW is 8.9 percent of our total coal generating capacity.

    •Current Retirements Almost Twice As High As EPA Predicted
    EPA’s power plant-level modeling projected that Agency regulations would close 14.5 GW of generating capacity. That number rises to 28 GW when including additional announced retirements related to EPA rules, almost twice the amount EPA projected. Moreover, this number will grow as plant operators continue to release their EPA compliance plans.

    Read the rest at: http://www.instituteforenergyresearch.org/2011/10/07/ier-identifies-coal-fired-power-plants-likely-to-close-as-result-of-epa-regulations/

  8. Steve Noll

    guess not. Back to lazy protestors.

  9. See how Jesse Jackson Jr. wants to “create” jobs.

    Jackson, Jr: Obama should ‘declare a national emergency,’ add jobs with ‘extra-constitutional’ action

    Read more: http://dailycaller.com/2011/10/12/jackson-obama-should-declare-a-national-emergency-add-jobs-with-extra-constitutional-action/#ixzz1agAZknnX

  10. JFK inherited a faulty plan developed by the CIA during the Eisenhower/Nixon administration for the Bay of Pigs invasion. If you do your research you will find that while JFK accepted full responsibility publicly for the failure of the Bay of Pigs, privately he vowed to “scatter the CIA to the winds” & the government investigation of the Bay of Pigs found that the it was the CIA that should rightly bear the brunt of responsibility for the failure.

  11. JFK had a greater hand in the Bay Of Pigs failure than you admit, as this article describes:

    http://www.britannica.com/blogs/2009/01/4-kennedys-failure-at-the-bay-of-pigs-top-10-mistakes-by-us-presidents/

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