Bill Clinton: Don’t Raise Taxes Now

Even Bill Clinton disagrees with Obama’s desire to raise taxes now. In a Face the Nation interview, he indicated that we shouldn’t raise taxes when the economy is so sluggish. He said to wait “a year or two” for economic growth to return, and then tackle the deficit by raising taxes.

The best plan of action is to not raise taxes at all across the board, or if you’re going to raise taxes, do so by closing loopholes like the mortgage interest deduction (which drives up interest rates and penalizes renters). And close loopholes in exchange for an across the board rate cut, which will help spur economic growth. Economic growth is the biggest generator of tax revenue.

Lest there be any doubt that tacking the deficit is best achieve through spending cuts and not through tax increases, two Harvard economists analyzed 107 separate attempts at fiscal reform in OECD (developed) countries from 1970 to 2007. The goals in each case was to lower debt-to-GDP ratios.

Their study confirmed the obvious: Instances that failed mainly relied on large tax increases and only modest spending decreases, if any.  Instances that succeeded mainly relied on large spending decreases and only modest tax increases, if any.

They also found that instances that relied on spending cuts rather than tax increases are less likely to create recessions.

Obama is setting us up for failure yet again.

The country needs a new CEO. Fast.

Corporations are anything but “creatures of the state”

Bill Clinton recently said that in law school they’re taught that corporations are creatures of the state.

If that’s what they teach in law school, get your tuition money back.

To be a creature of the state means that you’re created by the state. The only corporations that are creatures of the state are companies like Fannie Mae and Freddie Mac, which were in fact set up by the state.

As for almost all other corporations, in most cases they got their start in someone’s garage or basement or home office and grew from there. They are creatures of the private-sector person or persons who started them. They weren’t set up by the state or by any government official in any way.

To be sure, the state can create a good climate for corporations, such as transportation infrastructure and enforcement of contracts, but all too often it also throws up obstacles along the way, like over-regulation, over-litigation, and excessive taxation.

Note to Bill Clinton and to law schools: with a very few exceptions, corporations are not creatures of (i.e. created by) the state in any way.