THE AMERICAN REVOLUTION NEVER RESTS:

Economic revolution in the making (Marc Erikson, 11/04/04, Asia Times)

The recession Bush inherited from Bill Clinton as the Internet bubble collapsed wasn't nearly as pronounced as the Carter recession. But the Reaganite method he chose to combat it - tax cuts to stimulate business formation and consumer spending - was effective even as the economy was jolted by the events of September 11, 2001. Like Reagan, Bush has run up sizable new fiscal deficits - US$420 billion = 3.6% of gross domestic product (GDP) in fiscal 2004. But also like Reagan, he has laid the groundwork for their future reduction - to about $350 billion in fiscal 2005 and $300 billion in 2006. And note that contrary to Democratic campaign rhetoric, only about 20% of the current deficit was due to the tax cuts enacted in 2001-02. Going forward, substantial elements of the temporary tax cuts will be made permanent. Republican control of the legislature makes that a done deal. [...]

In his victory speech, Bush promised not so much further tax cuts as fundamental reform of the tax structure. This will be the cornerstone of the "ownership society" he outlined in his acceptance speech at the Republican National Convention. Income taxes over time will be substantially reduced and be replaced by consumption (value-added) taxes, which will allow individuals to decide on optimal allocation of their incomes and favor savings and investment over consumption. The effect should be added support for entrepreneurial activity and business creation. Tort reform to impose caps on damages and malpractice awards by courts is a further key aspect of unburdening, in particular, small and start-up enterprises.

Bush will also push for partial "privatization" of social-security and health-care financing, allowing individuals and families to manage their own retirement and medical-care financing.

The term "revolutionary" may be too grandiose to characterize these future legislative initiatives. And yet, as they are implemented, the ongoing process of enabling individuals and families to make their own choices and being rewarded for the added risks they are willing to incur charts an entirely different direction for US society than that exemplified by the European welfare states. Most Americans, on average, want the government and the taxman to get off their backs, live with the greater risks involved, and reap the greater rewards they expect from controlling their own futures. Nearly 70% of Americans now are homeowners. In ever growing numbers they create and own businesses. The average productivity gains ensuing will see the US economy forge even further ahead of competitors. That, ultimately, is the bedrock of US power on a global scale Europeans and others deride as "hegemonism". They might want to reflect on the fact that nothing but their own preferences for over-regulated social and economic structures stands in the way of replicating US power. "America is different," commented several puzzled European newspapers on the re-election of Bush. It is. But not necessarily therefore the worse off or morally inferior.

Europe can't catch up to where America was in the '80s--they'll never follow us into the 21st Century, the Century of Liberty.

Posted by Orrin Judd at November 4, 2004 11:39 PM