Kudlow: Please, Can We Just Grow the Economy?

If you are looking for a magic bullet, that would be a good place to start.

By + More

Larry Kudlow, a maximum friend of this blog, has been on fire lately. Great, great stuff. Here is some more:

Whether inflation comes roaring back remains to be seen. But I think the Fed’s balance-sheet expansion and the rise in M2 — even during a period of falling velocity — could be a longer-run inflation problem.

What’s the best way to curb this problem? Grow the economy, and produce plenty of new goods and services that will absorb the new money without inflation. I know folks have heard this from me before. But the best antidote for inflation — or sagging asset values in housing, stocks, and business — would be to slash the corporate tax rate, create a capital-gains tax holiday, and flatten the tax-rate structure for real pro-growth tax reform.

Contrary to what Obama is doing, let’s start rewarding producers and investors across the board, for all income levels. That will grow the economy, stop inflation, rescue housing, and reignite the stock market. And let’s keep the dollar steady while we undertake tax reform.

I believe it’s called supply-side economics. That’s out of favor now in Washington — isn’t it? Me: And that, my friends, is how you boost housing and stocks and jobs and incomes. Grow the bloomin' economy. The Fed recently projected long-term U.S. growth at around 2.7 percent. That is too slow by at least half a percentage point. We don't need a housing policy or a jobs policy. We need a growth policy.