I was on Kudlow & Co. last night. (Check out Larry Kudlow's great blog. ) Some observations and extras:
1) Larry interviewed the always personable presidential candidate Bill Richardson, who again touted himself as a pro-growth, tax-cutting Democrat ... which these days apparently amounts to suggesting a bunch of tax credits for favored industries that the government bets are the industries of tomorrow. One issue with that idea is that if venture capital firms have a tough time picking winners, how successful do government bureaucrats figure to be? The bigger issue, though, is that economic growth is not a big part of the Democratic agenda these days. It's almost as if the party views growth as a scam of sorts—25 years of almost uninterrupted growth, as Democrats see it, has brought us only stagnant wages and higher income inequality. Now it's time to redistribute the fruits of that growth through higher taxes on the rich and more government spending on healthcare and education. (Others on the left equate growth with environmental degradation rather than seeing it as a driver of human progress.) Yet Richardson does seem to realize that technology and innovation drive economic growth, which makes everything from Social Security to potential climate change a lot easier to deal with. That's something, I guess.
2) And Al Hubbard, director of Bush's National Economic Council, was touting the president's commitment to free trade. (Hubbard also let slip that the White House will apparently be pushing for a corporate tax cut in its next budget.) Larry asked him about Bush's record on spending. Before the show, I queried budget guru Chris Edwards of the Cato Institute about Bush's spending record and how the budget could have been balanced by now if the administration had shown just a bit of spending restraint. Here is his E-mail response:
Total federal spending in FY2008 is expected to be $2.925 trillion and the deficit $155 billion (per the [Congressional Budget Office's] August update). How might we have instead balanced the budget by 2008? Bush's first year was FY2001, when spending was $1.863 trillion, thus his actual spending increases (2001-2008) have averaged 6.7% annually. If instead, he had limited his annual spending increases to 5.8% annually, we would have a balanced budget this year. (Spending in 2008 would be $2.770 trillion=$2.925-$155 billion.) ... Spending under President Bush has increased an average 6.7% annually. But if he had restrained spending just slightly to 5.8%, the federal budget would be fully balanced in 2008 and the deficit wiped out." ... Fun fact: Bush will be the president who blasts through both the $2 trillion spending mark and the $3 trillion mark.