Former Minnesota governor Tim Pawlenty turned out a blockbuster economic-growth plan this past week, including deep cuts in taxes, spending, and regulations. It’s really the first Reaganesque supply-side growth plan from any of the GOP presidential contenders. And he caps it all off with a defense of optimism as he charges ahead with a national economic growth goal of 5 percent.

That’s right: 5 percent.

Pawlenty calls this target aspirational. Okay, fine. But deeper down, he’s basically saying no to the declinists and pessimists who seem to populate the economic landscape these days. Big government doesn’t work. Let’s try something different.

Ronald Reagan always believed that America is exceptional. By removing obstacles to growth, the Gipper held that economic policies could unleash a massive outpouring of risk-taking, creativity, and entrepreneurship. He was right, and his policies launched a two-decade-long boom.

Actually, the first couple years of the Reagan recovery came in at over 7 percent. And as Pawlenty noted in his speech at the University of Chicago this week, between 1983 and 1987, the Reagan recovery grew at 4.9 percent annually. I note that Pres. John F. Kennedy also had a 5 percent growth target, a response to Ike’s three recessions.

So while those on the left criticize Pawlenty, and while even some conservatives scoff at his growth target, history says we’ve been there before.

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Texas took yet another step this week that is certain to tighten its grip on the designation as the nation’s leading state for business. Governors in other states looking to improve their jobs situation should give serious consideration to mirroring the Lone Star State’s aggressive pro-jobs, pro-growth agenda.

On Tuesday the Texas Senate, under the leadership of Lt. Governor David Dewhurst and despite an aggressive lobbying effort by the Trial Lobby, voted unanimously in favor of “loser pays” tort reform legislation. On Wednesday, the House, which had passed a similar bill and was awaiting the Senate’s version, concurred with the Senate bill and passed it through. Gov. Rick Perry has said he will enthusiastically sign the bill into law.

‘Loser pays’ will require plaintiff’s to foot the bill of the winning party’s legal costs if a judge finds the case to be groundless. According to the Wall Street Journal, “This Texas upgrade would build on reforms in 2003 and 2005 that have vastly improved the legal climate in what has not coincidentally become the country’s best state for job creation.”

Negotiations on the bill were highly contentious in recent weeks, mostly due to a well-funded lobbying campaign by the Trial Lobby, which, in Texas, is virtually synonymous with the Democratic Party. Nevertheless, there was a breakthrough over the weekend.

From the Austin Statesman:

By a unanimous vote, the Texas Senate has just given final approval to a once-controversial “loser pays” bill designed to make it easier to get meritless lawsuits tossed out of court.

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On a historic night this past Thursday, a new Tea Party Republican Congress completely transformed U.S. economic policy. Elections matter, and so do their ideas. Smaller government, low taxes, and less spending were key election themes in the Republican landslide. And those themes triumphed this week as a large tax-cut bill finally passed the House and a monstrosity of a spending bill was defeated in the Senate.

In one fell swoop, Obamanomics is out the window. Reaganomics 2.0 is now in the driver’s seat.

Perhaps the most amazing part of the story was the work of Mitch McConnell and John McCain (among others) to kill the 2,000-page, $1.2 trillion omnibus spending bill in the Senate, along with its 6,600 earmarks totaling $8 billion. This budget monster dripped with contempt for voters and taxpayers. But business as usual was overturned.

I had an inkling of this when Sen. McCain told me in a CNBC interview earlier that night that, if need be, he would favor a government shutdown over passage of the spending bill. And now, under a short-term continuing resolution, the whole current-services budget baseline can be lowered by anchoring it to 2008 spending.

Hundreds of billions of dollars can be saved, producing a smaller government that will be, in effect, a tax cut for the private economy. And the symbolism of overturning massive spending only two years after Obama’s debt-laden stimulus package is enormously important.

Of course, the tax deal is far from perfect. But low tax rates will be preserved for personal incomes, capital gains, dividends, and estates. This is pro-growth and pro-capital formation, and it’s a confidence builder, too.

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