The Spectacle Blog

If It’s a ‘Sputnik Moment,’ Then It’s Time to Cut Marginal Tax Rates

By on 1.26.11 | 4:55PM

Obama's declaration last night that "this is our generation's Sputnik moment" has been met with too much scorn and derision in the conservative blogosphere. Understandably so: for too many on the left, Sputnik is simply a manufactured excuse to keep the river of red ink flowing.

But in this new and blessed age of civility and "bipartisanship," let's assume that our leftist friends actually do remember Sputnik as the impetus behind a grand new era of American progress and achievement. What, might we ask, brought about those golden days of yesteryear?

Well, to answer that question, let's go back to the history books.

Sputnik happened in 1957. A young Democratic senator from Massachusetts and World War II vet named John F. Kennedy was much concerned about Sputnik. He saw this Russian achievement as yet another indication that the Soviet Union was besting the United States and winning the Cold War (a struggle he would later call the "long twilight struggle" between liberty and tyranny).

Anyway, Kennedy ran for and won the presidency in 1960. He pledged to "get America moving again." He committed himself to an America that was "second to none":

I think we have to revitalize our society. I think we have to demonstrate to the people of the world that we're determined in this free country of ours to be first -- not first if, not first but, not first when -- but first...

I think the question before the American people is: Are we doing as much as we can do? Are we as strong as we should be? Are we as strong as we must be if we are going to maintain our independence, and if we are going to maintain and hold out the hand of friendship to those who look to us for assistance: to those who look to us for survival?

Kennedy didn't think America was "as strong as [it] should be." And the reason, he surmised, was that the heavy hand of big government was too onerous.

The feds, he realized, were stifling initiative and entrepreneurship. He knew the solution was to cut marginal tax rates. And so he did just that.

Kennedy cut the top marginal rate from 91 percent to 70 percent. He also cut tax withholding rates, instituted a new and more generous standard deduction, and increased deductions for child care and other familial expenses.

The result: the economic boom of the 1960s.

Unfortunately, Lyndon Johnson's profligate Great Society spending schemes, coupled with disastrous loose monetary policies by the Federal Reserve, soon wreaked havoc on the economy; and the result was the stagflation of the 1970s.

Ronald Reagan and Jack Kemp (aided by Paul Volcker and a more competent and responsible Federal Reserve) reignited the American economic engine in the 1980s. And, like Kennedy, they did this by dramatically cutting taxes and tax rates.

So if Obama and the Dems want to declare this "our generation's Sputnik moment," then Republicans should say: Great! Which taxes do you want to cut, and how deeply do you want to cut them?

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