Articles, Op-eds, and the term “Secular Stagnation,” continue to be reoccurring themes of conversation these days. Let’s start with the basics. Secular stagnation is a situation in a rich country where economic growth has ground to a halt, or remains at the very low level, due to chronic underinvestment in future potential. The lack of investment leads to falling per capita incomes over time and stagnant demand.
Larry Kudlow recently shared his point of view about this topic on www.realclearpolitics.com with an article entitled, “Secular Stagnation Is a Cover-Up.” He talks about how secular stagnation is just a cover up for our economic policy that began in the Bush years and intensified during Obama.
“It would be hard to conceive of a worse set of policy prescriptions than the ones Larry Summers, Barack Obama’s former chief economist, and his Keynesian collaborators have conjured up,” Kudrow states. “We’ve had bailouts, massive spending-stimulus plans, tax increases on ‘the rich’, Obamacare, rudderless monetary policy that has collapsed the dollar, the Dodd-Frank bill, anti-carbon policies, a vast expansion of the welfare state, and on and on.”
Throughout the article, Kudrow points out how much we can learn from the 1960s and 1980s – how fast the economy can turn around when policy mistakes are reversed.
Currently, the U.S. has the highest corporate income tax rate. All companies have to pay 35% of all profits made in the country and overseas. We’re seeing all these major corporations moving their headquarters to different countries – after all, they are more tax-friendly.
Eliminating the corporate income tax would stop this trend overnight.