As bullish as I am on the U.S. economy, this column by Larry Kudlow surprised me:
Did you know that just over the past 11 quarters, dating back to the June 2003 Bush tax cuts, America has increased the size of its entire economy by 20 percent? In less than three years, the U.S. economic pie has expanded by $2.2 trillion, an output add-on that is roughly the same size as the total Chinese economy, and much larger than the total economic size of nations like India, Mexico, Ireland and Belgium.
This is an extraordinary fact, although you may be reading it here first. ***
For those who bother to look, the economic power of lower-tax-rate incentives is once again working its magic. While most reporters obsess about a mild slowdown in housing, the big-bang story is a high-sizzle pick-up in private business investment, which is directly traceable to Bush’s tax reform. It was private investment that was hardest hit in the early decade stock market plunge and the aftermath of the 9-11 terrorist bombings. So team Bush’s wise men correctly targeted investment in order to slash the after-tax cost of capital and rejuvenate investment incentives.
The jobs and incomes pictures are very bright, too, as you would expect with that kind of economic growth. Read it all.
SCOTT adds: The jobs story in today’s New York Times suggests that the secret remains safe with Kudlow: “Jobs data indicates economy is slowing.”