Now that the Congress is out of town for their traditional Easter/Passover/Spring two week vacation, let’s spend this column time re-learning a bit of history. But first there is a quiz. Which Presidency does the following scenario most properly describe?
The U.S. had enjoyed over 25 years of economic growth. However, our country entered into an unpopular war and slipped into a deep recession. Our federal debt began to soar to unprecedented heights and the unemployment rate hit double-digit numbers. Our nation elected a President having been a first term U. S. Senator from a Midwestern state and his Vice President was from an eastern state. Together they formed unprecedented bonds and promised hope and change. One of the first acts of this Presidency was to push a stimulus package to stave off the unemployment rates. If you said Barack Obama and Joe Biden, you would be incorrect. These two men are Warren G. Harding and Calvin Coolidge and the time was what has been referred to as the “roaring 20’s.”
After enacting a stimulus package that embodied cutting income and corporate tax rates and chopping into federal spending, the rate of new businesses soared in the United States. New entrepreneurs enjoyed one of the most productive periods in our nation’s history. By the end of this era, unemployment had dropped from 11.7% to 2.4%. The average annual earnings per employee rose 34% and the national debt was cut by almost 1/3.
President Harding died of a heart attack two years into this work, so V.P, Calvin Coolidge, along with Harding’s businessman-banker Secretary of Treasury Andrew Mellon, took the reins. Their plan had four main goals. They were:
--Cut taxes on low incomes from 4 to 1/2%
--Cut top income tax rates from 73 to 24%
--Reduce the Federal Estate Tax
--Cut wasteful government programs
Over the next 6 years of Coolidge’s Presidency, the average unemployment was 3.3% and inflation was at less than 1%. The Coolidge free market stimulus plan of cutting taxes and unleashing America’s entrepreneurial spirit lead to the lowest misery index of any President in the 20th Century.
President Coolidge was quoted as saying: “After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world.” The logic of the programs implemented during this Presidency was simple; every dollar of government spending must be taken from the taxpayer. Moreover, every government job created, takes a job away from the private sector.
Congress may be out for their Easter/Passover/Spring break, but maybe we should spend some time learning from this history lesson.
Elizabeth Letchworth is the Owner-Founder of GradeGov.com, 4 times elected United States Senate Secretary for the Majority/Minority, U. S. Senate-retired, presently senior legislative advisor @ Covington & Burling, LLC.
