The American Option

Conn Carroll / February 04, 2009

Last Thursday in a speech at The Heritage Foundation, Sen. Jim DeMint (R-SC) unveiled his “American Option” alternative to President Barack Obama’s Trillion Dollar Debt Plan. From DeMint’s speech:

The Democrat bill takes money–actually, it bor­rows money–and decides where it should go. It does virtually nothing to stimulate the economy while it wastes billions of taxpayer dollars. It’s a hodge-podge of long-supported pet projects that the normal budget process would have thrown out. Using the troubled economy as their motive, Dem­ocrats have opened the floodgates for all sorts of outrageous wasteful spending.
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This bill is not a stimulus, ladies and gentlemen; it is a mugging. It is a fraud. Conservatives who fear proponents of this bill want to inch our economy closer to European-style socialism are kidding themselves. The proponents of this bill want to strap a big rocket on the back of our economy and launch it all the way to Brussels!
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Fortunately, there is another way. A better way. A way that will actually stimulate the economy, spur investment, and create jobs. A way that will perma­nently keep billions of dollars–immediately–in the private sector: in the hands of Americans who buy goods, provide services, start businesses, and hire employees.
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Instead of taking a trillion dollars out of the economy so politicians can spread it around to spe­cial interests, the American Option will keep a tril­lion more dollars in the hands of American workers and businesses. Instead of growing government, where waste and corruption run rampant, we grow the private sector, where innovation flourishes. Instead of giving the power and control of our econ­omy to politicians and bureaucrats, we give Ameri­cans and small businesses the freedom to spend and invest their own money.

The evidence in support of this legislation is not theoretical but historical, unlike the Keynesian arguments in favor of the Democrats’ debt plan. John F. Kennedy’s 1964 tax reductions led to 9 mil­lion new private sector jobs in five years. Ronald Reagan’s 1981 tax cuts led to 7 million in the same time frame. And five years on, the 2001 and 2003 tax cuts have led to the creation of 4 million and 6 million jobs, respectively.

Every time the United States has cut marginal tax rates, millions of jobs have been created–jobs that lifted the unemployed into the workforce, the work­ing poor into the middle class, and the middle class into long-term economic security.