The true message of the strong economy is that we're virtually guaranteed of a Goldilocks soft landing or better -- and certainly not a recession.
It's interesting that while the Bush tax cuts of 2003 continue to encourage investment and entrepreneurship, expanding national income and higher tax collections have brought the big bad budget deficit down to $160 billion, or roughly 1 percent of GDP. Using something called the primary deficit -- which extracts net interest on the debt and can be used to measure fiscal stimulus on the economy -- we actually have a 70 billion surplus.
These are all reasons why it would be foolhardy to embrace large-scale tax-hikes to allegedly fight the budget gap.
House tax chief Charlie Rangel's great idea to reduce the corporate income tax is the first pro-growth tax-cut measure from a Democrat in many years, and hopefully his effort will spur a discussion of full-scale tax reform by the Republican and Democratic candidates. But looking to the rest of Rangel's plan, there are ways to eliminate the alternative minimum tax that do not require big tax hikes on the most successful earners and investors.
For example, the Bush administration's tax-reform panel, chaired by former Sens. Connie Mack and John Breaux, proposed a growth-and-investment plan with only three income-tax brackets of 15, 25 and 30 percent. They would repeal the AMT and reduce the corporate tax to 30 percent. Capital gains and dividends would remain at 15 percent.
Or there's the new plan from Wisconsin House member Paul Ryan, which would move to a 10 percent and 25 percent tax system while also eliminating the dreaded AMT.
In other words, there are a lot of ways to gently nudge tax rates lower while broadening the tax base that would keep the Bush boom going well into the future.
The print and broadcast media do not give President Bush much credit for his economic policies. But somehow I have to wonder whether low unemployment, strong growth, negligible inflation and record stock markets do not deserve just a bit of praise.
It is still the greatest story never told.