10/12/2011

Game Changer?




Being an avid student of history it always is exciting to me when reading the chronicles of an event or of a time period when I come to a the point where something occurs and you just know, that was it. That was the event, the speech, the vote, the battle, the happening that changed the direction of history. Almost always it is not some spontaneous thing, it is just the culmination of the direction events were going anyway, but that happening takes place and the unfocused clarifies itself and the game changes.

With a along way to go and not a vote cast it is difficult to say that something in the current Republican Preidential nominating process could be a game changer, but perhaps this is.

"Herman Cain’s 9-9-9 plan would be a vast improvement over the current tax system and a boon to the U.S. economy, the goal of supply-side tax reform is always a broadening of the tax base and lowering of marginal tax rates."
and
"Mr. Cain’s plan is simple, transparent, neutral with respect to capital and labor, and savings and consumption, and also greatly decreases the hidden costs of tax compliance. There is no doubt that economic growth would surge upon implementation of 9-9-9."

That sounds like a ringing endorsement for, if not Herman Cain, at least his tax plan which has gotten so much attention of late. What makes it truly significant is that it comes not from some politician wishing to jump on the "Cain Train" but rather from the Godfather of Supply Side Economics himself, Art Laffer. For those who may not know who Dr Laffer is, for whom the Laffer Curve is named, here is a portion of his biography from CNBC.

Dr. Laffer’s economic acumen and influence in triggering a world-wide tax-cutting movement in the 1980s have earned him the distinction in many publications as "The Father of Supply-Side Economics." One of his earliest successes in shaping public policy was his involvement in Proposition 13, the groundbreaking California initiative that drastically cut property taxes in the state in 1978.

Years of experience and success in advising on a governmental level have distinguished Dr. Laffer in the business community as well. He currently sits on the board of directors of several public companies, which include: MPS Group Inc. (MPS) and Oxigene Inc. (OXGN). He also sits on the board of directors or board of advisors of a number of private companies including: Nicholas Applegate Institutional Funds, Retirement Capital Group, Pillar Data Systems, LifePics, Jovian Holdings, Roth Capital, Atrevida Partners, Health Edge Partners, First Q Capital, The Mayfair Group, and Endovascular Instruments. In the past, he has served on the board of directors of: Veolia Environnement, Provide Commerce, Neff Corporation, Petco, Clarcor and Amplicon Financial.

Dr. Laffer is a founding member of the Congressional Policy Advisory Board, a select group of advisors who assist in shaping legislative policies for the 105th, 106th and 107th United States Congress.

Dr. Laffer was a member of President Reagan’s Economic Policy Advisory Board for both of his two terms (1981-1989). He was a member of the Executive Committee of the Reagan/Bush Finance Committee in 1984 and was a founding member of the Reagan Executive Advisory Committee for the presidential race of 1980. He also advised Prime Minister Margaret Thatcher on fiscal policy in the United Kingdom during the 1980s.

To put it simply much of conservative and Republican economic policies are based upon the work and theories of Art Laffer. Only Milton Friedman is held in higher esteem in the "right's" economic realm than Art Laffer.

To put it bluntly had Dr Laffer made these views known prior to this past debate I doubt any of the other candidates would have dared criticize Herman Cain's 9-9-9 plan, at least not without much trepidation.

What can the other candidates now say when the man recognized as being the driving force behind Reganomics praises the plan? They now look slightly foolish making so light of something that has now been endorsed by a super star of right side economics.

More from the brief story in Human Events:
Laffer also said that "such a system provides the least avenues to avoid paying taxes, yet also maintains the strongest incentives for work effort, production, and investment."
Herman Cain's 9-9-9 plan will now have to be seriously considered and the fact that Dr Laffer is backing it will only increase it's popularity with fiscal conservative voters, even if the other candidates still attempt to make it out to be not a serious proposal.

It is however a serious and bold proposal the kind which American's have been looking for. It now has the potential to be a game changer, with the endorsement of a man who can not be dismissed.

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