I’ve come to a cross roads, and I believe many of you are with me. I no longer have faith that members of the Grand Old Party can represent me as a classical liberal or more specifically as a Conservative-Libertarian, and neither do I believe the majority of the members of the party share true forms of those ideologies.

This feeling began developing after the 2010 election when several friends and colleagues of mine and I developed ConservativeCongress.com to assess every single candidate self-proclaimed to be running as a conservative in the entire country. Thousands of unpaid and thankless hours were put into the project by myself and my friends. I myself put in roughly 2,000 to 3,000 hours alone. Then I watched as various state Tea Party groups and supposedly conservative minding groups signed off on the status quo. I became sick as state after state sent D.C. main stays and beltway insiders back to flap their gums about conservative principles while we all watched continuous compromise and a lack of any leadership with the House at their disposal.

The final blow personally for me was when I watched a man take my home district who had not lived in his home state in 18 years and also did not even own property in the state in which he was running for office. I’ve had the great privilege in my lifetime to travel extensively and live in various areas of our great nation. I remember very clearly living abroad in Australia some seven years ago and then upon returning spending the next four years moving around for graduate school and work. When I made it back home I hardly recognized the place in which I grew up. Everything had changed.

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On this day last year, I posted two charts that I developed using the Minneapolis Federal Reserve Bank’s interactive website.

Those two charts showed that the current recovery was very weak compared to the boom of the early 1980s.

But perhaps that was an unfair comparison. Maybe the Reagan recovery started strong and then hit a wall. Or maybe the Obama recovery was the economic equivalent of a late bloomer.

So let’s look at the same charts, but add an extra year of data. Does it make a difference?

Meh…not so much.

Let’s start with the GDP data. The comparison is striking. Under Reagan’s policies, the economy skyrocketed.  Heck, the chart prepared by the Minneapolis Fed doesn’t even go high enough to show how well the economy performed during the 1980s.

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With members of the mainstream media now hurling charges of using racially coded language against GOP presidential candidate Newt Gingrich, Big Government has uncovered a private memorandum written over three decades ago that offers a unique glimpse into Mr. Gingrich’s longstanding attitudes about race.

The private memo, dated July 1, 1980, was written by Mr. Gingrich on his official House of Representatives stationery and was sent to then-candidate Ronald Reagan’s campaign manager, Bill Casey, who would later become President Reagan’s CIA Director.

In the memo, Mr. Gingrich urges Governor Reagan’s campaign to reconsider its decision not to speak to the National Association for the Advancement of Colored People (NAACP) Convention.

“This is a great opportunity to prove that a conservative Republican can speak to the hearts and pocketbooks of Black Americans,” Gingrich urged in the memo.

The memorandum goes on to explain that a decision not to speak at the NAACP convention would insult African American voters and be a “tragedy” for the nation:

Many middle class Black Americans who would vote for Reagan will be insulted by his non-attendance.  I urge you to schedule the speech and talk about Kemp’s Inner City Jobs Bill, which Kilpatrick and George Will have both endorsed as acceptably conservative.

Failure to attend the NAACP convention will be a tragedy for Gov. Reagan and the country.  Symbolic events are vital.  Thank you for considering this.

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Alan Blinder has a distinguished resume. He’s a professor at Princeton and he served as Vice Chairman of the Federal Reserve.

So I was interested to see he authored an attack on the flat tax – and I was happy after I read his column. Why? Well, because his arguments are rather weak. So anemic that it makes me think there’s actually a chance to get rid of America’s corrupt internal revenue code.

There are two glaring flaws in his argument. First, he demonstrates a complete lack of familiarity with the flat tax and seemingly assumes that tax reform simply means imposing one rate on the current system.

Here’s some of what he wrote in a Wall Street Journal column.

Many useful steps could be taken to simplify the personal income tax. But, contrary to much misleading rhetoric, flattening the rate structure isn’t one of them. The truth is that 100% of the complexity inheres in the definition of taxable income, which takes up millions of words in the tax laws. None inheres in the progressive rate structure. If you don’t believe that, consider the fact that the corporate income tax is virtually flat once a corporation passes a paltry $75,000 in taxable income. Is it simple? Back to the personal tax. Figuring out your taxable income can be quite an effort. But once that is done, most taxpayers just look up their tax bill on an IRS-provided table. Those with incomes above $100,000 must perform a simple calculation that involves multiplying two numbers together and adding a third. A flat tax with an exemption would require precisely the same sort of calculation. The net reduction in complexity? Zero.

I can understand how an average person might think the flat tax is nothing more than applying a single tax rate to the current system, but any public finance economist must know that the plan devised by Professors Hall and Rabushka completely rips up the current tax system and implements a new system based on one tax rate with no double taxation and no loopholes.

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One of my frustrating missions in life is to educate policy makers on the Laffer Curve.

This means teaching folks on the left that tax policy affects incentives to earn and report taxable income. As such, I try to explain, this means it is wrong to assume a simplistic linear relationship between tax rates and tax revenue. If you double tax rates, for instance, you won’t double tax revenue.

But it also means teaching folks on the right that it is wildly wrong to claim that “all tax cuts pay for themselves” or that “tax increases always mean less revenue.” Those results occur in rare circumstances, but the real lesson of the Laffer Curve is that some types of tax policy changes will result in changes to taxable income, and those shifts in taxable income will partially offset the impact of changes in tax rates.

However, even though both sides may need some education, it seems that the folks on the left are harder to teach – probably because the Laffer Curve is more of a threat to their core beliefs.

If you explain to a conservative politician that a goofy tax cut (such as a new loophole to help housing) won’t boost the economy and that the static revenue estimate from the bureaucrats at the Joint Committee on Taxation is probably right, they usually understand.

But liberal politicians get very agitated if you tell them that higher marginal tax rates on investors, entrepreneurs, and small business owners probably won’t generate much tax revenue because of incentives (and ability) to reduce taxable income.

To be fair, though, some folks on the left are open to real-world evidence. And this IRS data from the 1980s is particularly effective at helping them understand the high cost of class-warfare taxation (click to enlarge).

There’s lots of data here, but pay close attention to the columns on the right and see how much income tax was collected from the rich in 1980, when the top tax rate was 70 percent, and how much was collected from the rich in 1988, when the top tax rate was 28 percent.

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While Obama tours the country promoting his personal donation plan, the Republican Presidential hopefuls are in a pitched battle for the nomination and arguing which tax simplification plan is best. Threatened with the possibility of rate cuts, the Media and politicians trot out the usual suspects of lies about tax hikes and tax cuts.  This is a battle Republicans must win and, to do so, they need to expose those lies.

Keep in mind that the battle between those who create wealth and those that want to redistribute it, mainly politicians, is as old as civilization itself.  We read of tax battles and even reform in every age, like Urukagina’s tax reductions in Babylonia/Sumer in 2350 BC.  Equally venerable are the constant set of demagogic lies by those against tax cuts and simplification.  It is important to note that politicians like complicated tax codes and high tax rates because they control those rates and dispense the loopholes and regulations that complicate the tax code.  Tax simplification means they lose power.  As a result, resistance to tax reform is more often the rule than reform. As for the lies, they abound, so let’s consider just a few:

Lie # 1: Tax cuts cause deficits/Tax hikes balance the budget.  The Media and the Left often say that the Reagan and Bush tax cuts led to deficits while Clinton’s tax hikes led to a balanced budget. In truth, according to the IRS, federal tax revenues rose dramatically after the overall Reagan tax cuts/reforms (98%) and the Bush tax cuts (a record $700+ billion). This is just as they did after the Harding/Coolidge cuts (61% revenue increase) and after the Kennedy/Johnson cuts (62% revenue increase).  Those are the four major income tax reductions we have had since the inception of the income tax in 1913 and every time revenues rose after they were in place – every time.

So did the tax rate cut cause a deficit? The lie, of course, is to blame the revenue gathering mechanism (tax code/rate cut) instead of the revenue spending mechanism, i.e. Congress/Presidents.  The spenders kept spending – often at an accelerated rate when they saw the new revenues.  Thus, the fault for continuing deficits lies not with tax rate cuts, which produced higher revenues, but with politicians who spent too much.

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There’s an interesting debate in the blogosphere about whether President George W. Bush was a conservative (here’s a good summary of the discussion, along with lots of links, though I especially like this analysis since it cites my work.).

I’ve already explained that Bush was a statist rather than a conservative, and you can find additional commentary from me here, here, here, and here.

Simply stated, any President who doubles the burden of federal spending in just eight years is disqualified from being a conservative – unless the term is stripped of any meaning and conservatives no longer care about limited government and constitutional constraints on Washington.

But if you don’t want to read the blog posts I linked above, this chart should make clear that Bush was a big spender, not only when compared to Reagan, but also compared to Clinton. Moreover, we’re only looking at overall domestic spending, so this doesn’t include Iraq, Afghanistan, and other defense expenditures. And these are inflation-adjusted dollars, so we’re comparing apples to apples.

But let’s also examine the burden of domestic spending as a share of GDP. As you can see, there actually was progress during the Clinton years, and significant progress during the Reagan years. But all that was completely wiped out during the Bush presidency.

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America faces a fiscal crisis. The burden of federal spending has doubled during the Bush-Obama years, a $2 trillion increase in just 10 years. But that’s just the tip of the proverbial iceberg. Because of demographic changes and poorly designed entitlement programs, the federal budget is going to consume larger and larger shares of America’s economic output in coming decades.

For all intents and purposes, the United States appears doomed to become a bankrupt welfare state like Greece.

But we can save ourselves. A previous video showed how both Ronald Reagan and Bill Clinton achieved positive fiscal changes by limiting the growth of federal spending, with particular emphasis on reductions in the burden of domestic spending. This new video from the Center for Freedom and Prosperity provides examples from other nations to show that good fiscal policy is possible if politicians simply limit the growth of government.

These success stories from Canada, Ireland, Slovakia, and New Zealand share one common characteristic. By freezing or sharply constraining the growth of government outlays, nations were able to rapidly shrinking the economic burden of government, as measured by comparing the size of the budget to overall economic output.

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President Obama unveiled his fiscal year 2012 budget today, and there’s good news and bad news. The good news is that there’s no major initiative such as the so-called stimulus scheme or the government-run healthcare proposal. The bad news, though, is that government is far too big and Obama’s budget does nothing to address this problem.

But perhaps the folks on Capitol Hill will be more responsible and actually try to save America from becoming a big-government, European-style welfare state. The solution may not be easy, but it is simple. Lawmakers merely need to restrain the growth of government spending so that it grows slower than the private economy.

Actual spending cuts would be the best option, of course, but limiting the growth of spending is all that’s needed to slowly shrink the burden of government spending relative to gross domestic product.

Fortunately, we have two role models from recent history that show it is possible to control the federal budget. This video from the Center for Freedom and Prosperity uses data from the Historical Tables of the Budget to demonstrate the fiscal policy achievements of both Ronald Reagan and Bill Clinton.

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President Obama, in his State of the Union address Tuesday night, was right to focus on the challenges the United States faces as domestic companies try to compete with low-cost global competitors. But he was wrong to suggest that the United States can “win the future” by getting Washington more involved in innovation and education.

As the president conceded elsewhere, Washington is, in fact, a big part of the problem—with high corporate tax rates and excessive regulation.

Just a week earlier in a Wall Street Journal article, the president elaborated on this, rhetorically declaring a truce with business and laying out the administration’s strategy for moving “toward a 21st-century regulatory system.”

Mr. Obama said this new system would need to strike a balance between the innovativeness, job-creating capacity and robust growth produced by free markets and the responsibility of government to impose “common-sense rules” to protect the public. He called for a “government-wide review of . . . rules already on the books,” and said that “careful consideration” would be given to the costs and benefits of all pending regulations. But as Yogi Berra once said, “This is like deja vu all over again.”

Presidents Clinton and Reagan both signed executive orders requiring that proposed federal regulations be implemented only if their economic benefits exceeded the costs of complying with them. Reagan even established a branch within the Office of Management and Budget—the Office of Information and Regulatory Affairs (OIRA)—to make sure executive branch agencies complied. The executive orders by and large were ineffective.

In fact, the federal government has been expanding its control of the private economy since the 1890s, on the theory that vulnerable people must be protected from cradle to grave by an omniscient bureaucracy that knows what’s best for them. The growth in regulation typically has been justified by analyses, prepared by the regulatory bureaus themselves, which grossly overstate regulation’s benefits and understate its costs.

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As we look around the country today, it’s easy to be discouraged. Unemployment remains high and the Obama Administration continues to stubbornly endorse the same tired policies that have been proven failures. But as we approach the 100th anniversary of Ronald Reagan’s birthday, it’s worth remembering that there are lessons in the past that we should take to heart. After all, as Heritage President Ed Feulner pointed out Tuesday, even liberals have been working to co-opt Reagan’s legacy.

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This via a press release from the Young America’s Foundation (YAF). Reagan paraphrases a bit of scripture in the preview below, “I look to the hills, from whence cometh my strength.” Reads the actual scripture, “I lift up my eyes to the hills from whence cometh my help. My help comes from the Divine; Maker of heaven and earth.”

SANTA BARBRA, CA – Young America’s Foundation announced today that their inaugural film production, Still Point in a Turning World: Ronald and his Ranch, will premier at the conclusion of the Foundation’s Reagan 100 Gala with Vice President Dick Cheney. The dinner banquet will be held at the Reagan Ranch Center on Saturday night. The film, written and directed by Stephen K. Bannon, is the definitive examination of Ronald Reagan’s beloved ranch and its personification of his philosophy and values. Ronald Reagan’s Rancho del Cielo, the “‘Ranch in the Sky,” was not just a respite from the chaotic world that his Presidency encountered, but also a living embodiment of the values he held dear. The Ranch was where hard work and self-reliance showed themselves in the principles he championed for all Americans: Freedom, Prosperity, Victory.

The thought of an homage to Reagan’s Ranch left me thinking about Sarah Palin’s recent travelogue from Alaska, which some in the establishment viewed as un-presidential. Somehow I doubt they would dare say the same thing about former President Reagan drawing strength from his ranch. It’s also worth noting how his Crawford ranch played such a significant role in the presidency of George Bush. The theme of a rugged outdoorsman, or perhaps one day a woman, and the American spirit, and even the presidency, goes all the way back to Teddy Roosevelt, if not further. (more…)

Ronald Reagan would have been 100 years old on February 6, so let’s celebrate his life by comparing the success of his pro-market policies with the failure of Barack Obama’s policies (which are basically a continuation of George W. Bush’s policies, so this is not a partisan jab).

The Federal Reserve Bank of Minneapolis has a fascinating (at least for economic geeks) interactive webpage that allows readers to compare economic downturns and recoveries, both on the basis of output and employment.

The results are remarkable. Reagan focused on reducing the burden of government and the economy responded. Obama (and Bush) tried the opposite approach, but spending, bailouts, and intervention have not worked. This first chart shows economic output.

The employment chart below provides an equally stark comparison. If anything, this second chart is even more damning since employment has not bounced back from the trough. But that shouldn’t be too surprising. Why create jobs when government is subsidizing unemployment and penalizing production? And we already know the so-called stimulus has been a flop.

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The White House recently released a video, narrated by Austan Goolsbee of the Council of Economic Advisers, asserting that higher tax rates on the so-called rich would be a good idea.

Since Goolsbee’s video made so many unsubstantiated assertions and was guilty of so many sins of omission, here’s a rebuttal video, narrated by yours truly.

This new Center for Freedom and Prosperity video includes the full footage of the White House production, so viewers can decide for themselves which side is correct.

This rebuttal video, incidentally, only scratches the surface. There was not enough time to cite the wealth of data and research showing how higher taxes undermine economic performance. There was not enough time to address some of the additional flaws of class-warfare tax policy. And there was not enough time to show how simple it is to balance the budget without higher taxes.

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On the latest episode of Uncommon Knowledge with Peter Robinson, Rob Long and Mark Steyn reflect on speeches given by Ronald Reagan and discuss their relevance today.

Reagan argued that the beginning stage of socialism is when the state gets control of Health Care.  Our freedom is infringed upon once the government can control where and how we work.  Once given this power, the government will only gain even more control – how long until they tell us what we can or can’t eat?

Steyn and Long argue that the federal government is acting like Mommy and Daddy – paying for everything to where we are so infantilized that our salary is more like allowance, only used for toys.

Steyn and Long hope that conservatives get back to Reagan’s Liberty argument, meaning instead of opining against “big government,” advocating for “big freedom.”  And that a nation with “big freedom” must include a President who is a citizen legislator, not a moral guidepost and leader who knows what’s best for the masses.

As Reagan said in his first inaugural address, “we are a nation that has a government, not the other way around.”

Watch the full episode below.  And be sure to visit us on Facebook and Twitter.

A must read in today’s New York Times: (it happens)

With the Senate’s passage of financial regulation, Congress and the White House have completed 16 months of activity that rival any other since the New Deal in scope or ambition. Like the Reagan Revolution or Lyndon Johnson’s Great Society, the new progressive period has the makings of a generational shift in how Washington operates.

First came a stimulus bill that, while aimed mainly at ending a deep recession, also set out to remake the nation’s educational system and vastly expand scientific research. Then President Obama signed a health care bill that was the biggest expansion of the safety net in 40 years. And now Congress is in the final stages of a bill that would tighten Wall Street’s rules and probably shrink its profit margins.

If there is a theme to all this, it has been to try to lift economic growth while also reducing income inequality. Growth in the decade that just ended was the slowest in the post-World War II era, while inequality has been rising for most of the last 35 years.

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According to a Washington Post story, Obama wants to be the anti-Reagan, a President who permanently changes the American people’s attitude about big government. Obama’s efforts to make statism popular, however, are not exactly working out as he hoped.

According to a new Washington Post-ABC poll, the American people have become much more libertarian when asked if that want a bigger government with more services or a smaller government with fewer services. But this is just part of the story. As David Boaz points out, more accurate polling data, which mentions that bigger government also means higher taxes, reveals that support for small government becomes even more pronounced. Here’s an excerpt from the Post story:

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As Congress recklessly moves to enact evermore programs in the face of ever larger deficits, it is only a matter of time before they take up the revenue side of deficit equation: Spending – Tax Revenue = the Deficit.  Of course, in response to rising deficits, the Media and the Democrats will reflexively demand tax increases. Republicans, for their part, simply must be able to articulate why higher taxes will actually result in larger deficits not smaller.

I offer this common sense guide for the great battle to come.

At the outset, it must be noted that, in practice, politicians don’t actually raise taxes so much as they pass laws to increase tax “rates,” i.e. income rates, sales tax rates, etc.  They do in an ill-founded pursuit of more tax revenue.

It is ill-founded because tax rate increases, over time, yield less revenue than tax rate cuts.  For instance, when the economy was bad in the early 1990’s, the California legislature raised tax rates and over a 3 year period, revenues actually dropped.  By 1999, Bill Clinton’s tax rate increase resulted in the highest overall tax burden in our history – a recession naturally followed which led to declining revenues.

These common sense points explain why tax rate cuts, over time, will raise for more money than tax rate increases.

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From an email to Newsweek:

“The Nobel gang just suicide bombed themselves. Gore, Carter, Obama, soon Bill Clinton. See a pattern here? They are all leftist sell-outs. George Bush liberates 50 million Muslims in Iraq, Reagan liberates hundreds of millions of Europeans and saves parts of Latin America. Any awards?… Obama gives speeches trashing his own country and for that gets a prize, which is now worth as much as whatever prizes they are putting in Cracker Jacks these days.”

“This fully exposes the illusion that is Barack Obama. It is a greater embarrassment than losing the Olympics bid. And with this ‘award’ the elites of the world are urging Obama, THE MAN OF PEACE, to not do the surge in Afghanistan, not take action against Iran and its nuclear program and to basically continue his intentions to emasculate the United States. They love a weakened, neutered U.S and this is their way of promoting that concept.  I think God has a great sense of  humor, too.” (more…)