Supply Side Economics for Disasters

Jack Kemp had a great piece at a couple of days ago. He urged budget restraint, especially in the event of a disaster like Katrina. He offers this as the key to success: “The only rational way to pay for the current emergency is to strengthen long-run economic growth to ensure the revenues we need. That means not raising capital gains and dividends tax rates in a few years as provided for in current law and not allowing the death tax to spring back to life at 55 percent after expiring for a single year. It means enacting fundamental reforms to the tax code that will make it possible to raise more revenues at even lower tax rates. It means applying private-sector solutions and public-private partnerships to the problems facing those displaced by Katrina and then to all of America’s poor.” In terms of the larger role of government Kemp adds: “We shouldn’t be bamboozled by the left’s exploiting of Katrina to lobby for bigger, more centralized government. It wasn’t just the hurricane that caused the calamity; it was a catastrophic failure of government at all levels.”