Keith Rothfus: A new/old plan for growth
A healthy economy makes all the difference for Americans looking to achieve their dream, whether that's providing for your family, having a satisfying career, owning a home, saving for retirement or investing in your child's education.
When the economy is not growing, fewer job opportunities exist and workers' hard-earned wages often do not keep up with expenses.
Unfortunately for too many Americans, that has been the story for at least the past decade. Since the end of the Great Recession, the United States has experienced the slowest economic recovery since World War II. Many people have been living paycheck to paycheck.
The recession helped propel the election of Barack Obama as people looked for hope and change. Regrettably, President Obama's administration pursued progressive policies that focused more on Washington micromanagement, wealth redistribution, and picking winners and losers rather than on robust, sustainable growth for the rest of the country. Years after the financial crisis ended, the Obama economy kept falling short of growth estimates. Ironically, income inequality worsened under Obama administration policies. The concentration of wealth in pockets like the Washington, D.C., suburbs, which include five of the 10 richest counties in the country, solidified.
Through early 2017, the persistently sluggish economy caused many to abandon the idea that there could ever be healthy growth again. Older workers waited for raises that never came while their health care, housing and education costs skyrocketed. Seniors who saved for years earned little interest on their savings. And the millennial generation, which never saw the healthy growth of the mid- to late-'80s and '90s, were robbed of the opportunity to develop their skills and talents in fulfilling careers.
Now, a model for the economy different from the one applied in the Obama administration is about to be tested. This is a “new” model that Presidents Kennedy, Reagan, and Clinton pursued and which resulted in much better growth than that experienced over the last decade. Rather than trickle-down government, the tax and regulatory reforms adopted over the past year are designed to empower the American people, not Washington, D.C.
In his 1962 address to the Economic Club of New York, President Kennedy said the “best means” to achieve economic growth is “an across-the-board, top-to-bottom cut in personal and corporate income taxes.” Presidents Reagan and Clinton followed the same path, and contrary to the naysayers in the '60s, '80s and '90s, not only did economic growth pick up, tax revenues actually increased following the reduction of tax rates.
This is precisely the course Congress and President Trump followed in December with the passing and signing of the Tax Cuts and Jobs Act.
With pro-growth tax and regulatory policies, we are much more likely to return to the historical 3 percent to 4 percent average growth rates we saw between the end of World War II and 2008.
Even before the enactment of the new tax cuts, there was evidence of renewed economic optimism. Consumer confidence has reached its highest level since 2000. In the second and third quarters of 2017, our economy grew at 3.1 percent and 3.2 percent, respectively. And according to the Tax Foundation, the tax cuts will help grow our economy by $5 trillion over the next decade.
At the end of the day, The Tax Cuts and Jobs Act brings back growth for American workers and families that can look forward to more jobs and higher incomes. What a way to start the new year!
Keith Rothfus, a Republican, is the U.S. representative for Pennsylvania's 12th Congressional District.