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In the February 2013 issue of Imprimis, Amity Shlaes wrote the article titles “Calvin Coolidge and the Moral Case for Economy”.
The following paragraph is from that article.
“In short, Coolidge didn’t favor tax cuts as a means to increase revenue or to buy off Democrats. He favored them because they took government, the people’s servant out of the way of the people. And this sense of government as servant extended to his own office. Senator Selden Spencer once took a walk with Coolidge around the White House grounds. To cheer the President up, Spencer pointed to the White House and asked playfully, “Who lives there?” “Nobody,” Coolidge replied. “They just come and go.””
Many politicians know that tax cuts increase government revenue because they stimulate the economy and conversely tax increases decrease government because they depress production in the private sector.
Calvin Coolidge did not worry about increasing government revenue because he believed that government spending should be strictly controlled and no unnecessary government spending should be allowed.
In 1923, Calvin Coolidge succeeded Warren Harding after Harding’s untimely death. Both Harding and Coolidge cut spending and taxes. Their actions led to the boom that was called “The Roaring Twenties”.
The kind of tax and spending cuts that Harding and Coolidge put in place could do the same thing today.
The one problem with that scenario is that the Federal Reserve System is still in place.
No matter what the government does, the Fed would still be capable of causing another great depression just like they caused last one.
Most of the politicians or political candidates who would be willing to significantly cut spending, cut taxes and eliminate the Fed are Tea Party candidates.
If the Tea Party candidates win big in 2014, there is a chance for a return to a booming economy.