- The Washington Times - Tuesday, December 11, 2001

Less government, not more, responsible for '90s prosperity

In a Dec. 7 letter to the editor, John King attempts to correct Commentary columnist Daniel J. Mitchell, claiming that the "Clinton tax hike [was] responsible for '90s prosperity" rather than the Reagan tax cuts of the 1980s. Mr. King contends that by lowering public debt, the Clinton tax increase of 1993 caused lower long-term interest rates, which then permitted the U.S. business investment that led to a decade of prosperity.
Macroeconomics, however, is not that simple. According to Mr. King's logic, Japan, which had interest rates at or near zero during the 1990s, should be robustly prosperous today rather than in a 10-year recession.
U.S. prosperity in the 1990s was a product of many factors; the availability of capital at moderate interest rates was only one. Other important factors were increased productivity (especially in the technology industry), more free trade, lower taxes and less government regulation of business. Compared to the rest of the world, the United States enjoys low taxes and little government regulation of business. As history shows, the less governments burden businesses, the more prosperous a country's economy becomes.

PotomacSince when did the comics find a place on the editorial page? The Dec. 7 letter "Clinton tax hike responsible for '90s prosperity" was a real hoot. Imagine claiming that in the 1990s "expansion was triggered by President Clinton's tax increase." Since when did taking money out of the economy actually expand the economy?
Nothing that the government does makes the United States as a whole richer at the end of the year. If the functioning of the government was prosperous, then the government would be making money. If only the government operated next year, would we be richer come Dec. 31?

FairfaxJohn King claims that Bill Clinton's tax increase made the 1990s prosperous. Mr. King has forgotten a basic tenet of our country's economy increases or decreases in tax rates do not change the economy overnight. Rather, they take from four to seven years to have any effect, much like most investments.
President Reagan's tax cut did not begin to reap dividends until the economy started growing rapidly during his second term (about six years after enactment of the cut). Growth continued throughout President George H.W. Bush's term. As for the deficit spending of the 1980s, it was a Democratic Congress that controlled spending then, and against their wishes, Mr. Reagan refused to let defense spending be cut. Consequently, Congress decided to spend beyond its coffers, not Mr. Reagan.
Our economy continued to grow through Mr. Clinton's tax increase, until finally higher taxes reeled in the laws of economics in late 1999 (about six to seven years after the tax increase went into effect). Why? Because the well of investment capital dried up.
Lower long-term interest rates, buoyed by filling government coffers, do not induce investment. Interest rates do not drive the economy the American people do. It was a combination of Americans continuing to put their money in the stock market (despite the largest tax increase in history) and the compounding interest returned on investments made earlier that fueled the spiraling growth of the 1990s.
No nation in history has ever taxed itself into prosperity. Giving the government money is no different from paying someone who is capable of working not to work.


'Moral conservatives' were critical factor in Earley loss

With a homosexual population of less than 2 percent, and most of those committed Democrats, it is ludicrous for Ken Byrer, deputy director of public affairs for the Log Cabin Republicans, to insinuate that "Anti-gay ad themes may have cost [Mark] Earley [the] election" (Letters, Dec 8).
Even Democrat Mark Warner took a low-profile position regarding the homosexual agenda. It was not until the weekend before the election, when there was sure to be no press exposure, that the Virginia Partisans Gay & Lesbian Democratic Club sent a mailing showing Mr. Warner with the club's president. Only then did Mr. Warner promote issues such as hate-crime legislation, special privileges for homosexuals and abortion.
The base of the Republican Party consists of moral conservatives. It was this base, reacting to Bill Clinton's threat to the nation's moral fabric, who turned out in droves to elect Republicans in 1994. They stayed at home in 1996 because presidential candidate Bob Dole refused to address the issues that they were concerned about.
The same thing happened this year in Virginia. The Earley campaign paralyzed itself by employing focus groups, who convinced them to distance themselves from the conservative base. The campaign made practically no attempt to rally the pro-life supporters, Second Amendment supporters, home schoolers and Christian evangelicals. That is why they lost.
I can think of nothing that will drive the conservative core of the Republican Party away from the polls faster than the involvement of homosexuals in Republican politics. The Log Cabin Republicans should realize that they are a threat to the Republican Party. As one who has fought for years to get religious conservatives involved in the political process, I know firsthand just how quickly they will become uninvolved if they perceive a threat to their principles.

Falls Church

No to mental-health parity bill

Psychiatrist Thomas Szasz hits the nail on the head ("Thumbs on the parity scale for psychiatrists," Commentary, Dec. 9). The House of Representatives should not pass the parity bill for several reasons.
First, mental illness is a disease metaphorically, but not literally. If it was a real brain disease, standard textbooks on pathology would recognize it as such.
Second, if the parity bill is passed, people with real diseases will be deprived of needed insurance coverage. Insurance companies will be forced to pay to treat people with ethical problems, not medical problems. People with "mental illness" can control their behavior, and in many cases they don't even want "treatment."
Third, the parity bill smacks of socialism. Government has no business dictating what insurance companies sell. If it was cost effective to cover the treatment of mental illness, insurance companies would already do so. Parity for mental illness, however, is not cost effective. Therefore, insurance customers will bear the burden via higher premiums if the parity bill is passed.
Finally, it is worth noting that criticism of this bill is rarely heard. For the House to make an informed decision, they should first study the arguments contesting the idea that mental illness even exists. Why are other newspapers too frightened to publish opinions critical of the bill?


Jeffrey A. Schaler is adjunct professor at the School of Public Affairs of American University.

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