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Gifts for all occasions in the Galleria! Subscribe to the "What is the Deal?" mailing list. October 12, 2003 What is the Deal with Democrats and Economics? By Jan A. Larson While the Democratic Presidential candidates look for issues on which to attack the President, it seems that one issue that has had the gang of nine whipped into a frenzy, the economy, might be turning in the President's favor. A recent report from Fox News indicated that the number of unemployment claims fell below the 400,000 mark in the first week of October. Claims below 400,000 are generally viewed as positive for the economy. Confirming a strengthening economy is the 3.3% growth in the second quarter and a projected 5% growth (on an annualized basis) in the third quarter. Further, the 2003 federal deficit is projected to be $380 billion, down from earlier projections of $455 billion. To be sure the overall unemployment rate remains above 6%, the fact is that the economy is starting to regain the traction that leads to job creation and sustained growth. How did this happen? Higher taxes and more government spending? The Dems would want you to believe that high taxes and greater government spending is the answer to unemployment, but as has been seen countless times in the past, that combination is never the answer. Putting money into the hands of the people, including wealthy people (despite the Dems' aversion to do so), provides the fuel for the economic engine. It has been reported that over $140 million in venture capital flowed into a couple of dozen businesses in the Austin, Texas area in the second quarter with more flowing in Silicon Valley and elsewhere. Venture capital doesn't come from people that the Washington politicians consider "wealthy," that is, middle-class couples earning $80,000. Venture capital comes from the truly wealthy, that is the "rich" that the Democrats so universally revile. The "idle rich," when left to their own devices as to where to put their money, fund hundreds of companies that may initially employee tens to hundreds of employees, but may eventually grow to employ thousands. When the President's tax cuts went into effect, the liberal naysayers lamented that the cuts would only benefit "the rich," would only add to the deficit and wouldn't help the economy. One of the most consistent naysayers, South Dakota Senator Tom Daschle, complained that the President spent too much time focusing on his tax-cut and pro-business strategies during a recent appearance in New Hampshire. Tom, Tom, Tom. If you only knew how tax cuts and a pro-business strategy worked, maybe you wouldn't have been so disappointed. Unfortunately, Daschle and many of his fellow Democrats just don't seem to "get it" when it comes to the basic rules of economics in a capitalistic society. They complain that the President isn't doing enough to turn the economy around and create jobs but yet oppose the single best action, tax reduction, that will create those long sought after jobs. Dems denounce pro-business strategies, but yet it is businesses that provide jobs. How many people are self-employed? A good number, to be sure, but the vast majority of the working population in America work for businesses, both large and small. Dick Gephardt and Howard Dean want to repeal all of the Bush tax cuts while John Kerry wants to only roll back the tax cuts for the "wealthy." Just where do they expect new jobs to come from? More government jobs? How about some more postal workers? Maybe we could use some more bureaucratic paper pushers in the Department of Do Nothing? Daschle, Gephardt, Dean, Kerry, et al just don't understand economics. Fortunately, the President does and by the time the 2004 election rolls around, if the economy continues on its present course, the Democrats will have one less campaign issue. -- Send feedback to the author. The "What is the Deal?" column will appears weekly on the Pie of Knowledge website. Guest submissions are welcome and encouraged. To submit an article to "What is the Deal?" click here. To subscribe to the "What is the Deal?" mailing list and receive early notification when a new column is available, click here. The Pie of Knowledge will never, ever divulge email addresses to any third party for any reason unless so ordered by a court of law. Contributions to the Pie of Knowledge are greatly appreciated. 
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