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This article was originally posted to Forbes.com on October 17, 2011
I have decided to support Herman Cain for President of the United States, and have joined his team of economic advisors.
Central to my support are Cain’s pro-growth economic policies. They are responsive to the challenges facing America after more than 10 years of stagnation, an unemployment rate stuck near 9% for 2.5 years, trillion-dollar deficits and the ongoing risk of financial crisis. Just as important, they reveal a governing philosophy that trusts in the liberty of the American people rather than government to create the jobs and businesses necessary to compete in today’s global economy.
Cain’s “9-9-9″ tax plan is based on sound economic principles. Broaden the tax base, drop the tax rates, simplify the tax code and collect the same amount of revenues. Get rid of today’s complex and corrupt personal income and corporate income tax codes. Eliminate federal payroll taxes, the capital gains tax and the death tax. Generate the same amount of revenue with a flat personal income tax of 9%, a corporate flat tax of 9% and a consumption tax of 9%.
The lower tax rates would reduce the tax barriers to U.S. economic growth and job creation, leading to a bounty of both. Tax simplification also would eliminate the dead weight loss of tens of billions of dollars spent to comply with or avoid today’s tax system. By putting Americans back to work, instead of pitting them one against the other, the 9-9-9 tax plan would generate additional revenues governments at all levels need to meet their obligations.
Those who criticize Cain’s tax plan based on an analysis of who pays what taxes are forgetting two vital aspects of tax policy. First, the cost of the current tax system is imbedded in prices of many of the goods that all of us — rich and poor — purchase. The generally higher prices for food and shelter and almost everything else in New York City, for example, reflect in part the generally higher tax burden on those who live and work in the city. Second, the heaviest burden of today’s tax system is born by those who are unemployed because of the distortions and perverse incentives it imposes on the U.S. economy.
Beyond the technical pro-growth aspects, the 9-9-9 plan would shake up the politics-as-usual status quo. The power of lobbyist would be reduced — because there will be so much less to lobby for. The deductions that allow big corporations and the truly wealthy to game the system are removed.
Cain would reduce the burden of government further by actually reducing the level of government spending, not just some future growth in spending 10 years from now. He would start with a 10% across the board reduction in the spending by all agencies. For an operation as bloated as the federal government such cuts should actually lead to improved performance by, among other things, eliminating those functions that may at one time have made sense, but that are now expensive distractions, expensive not only in terms of money, but also in vital management time. Regulatory policies would also come under sharp review. Federal regulations now cost the U.S. economy an estimated $1.7 trillion, or an astounding 12% of the entire income of the American people and businesses. Up for repeal will be ObamaCare, Dodd-Frank “financial reform” and Section 404 of Sarbanes Oxley. The EPA’s job-killing, anti-energy production agenda will be rolled back. Expect patient centered health care reform and an all out effort to develop the America’s vast natural gas and oil reserves now accessible because of breakthroughs in drilling and extraction technologies. This approach will by itself, create tens of thousands of high paying jobs. More important, it will end the “energy crisis” and get the government out of the business of manipulating the kind of cars we buy and telling us what kind of light bulbs to use in our homes.
Finally, Cain distinguishes himself by his understanding that a pro-prosperity monetary policy is one that first and foremost stabilizes the value of the dollar. “A dollar must always be a dollar, just as an hour is always 60 minutes,” he explains. Imagine the benefits to American businesses and families of knowing with a very high level of certainty that the buying power of the dollar five, 10 or 20 years from now would be approximately the same as it is today. Businesses could plan without worries about inflation or deflation, or big swings in the price of oil and other commodities. Interest rates would be predictably low and stable. Money now hiding in inflation hedges would once again be available to invest in productive, job creating companies.
Cain’s foreign policy is summed up by his goal of peace through strength and clarity. Central to his Middle-East policy is the clear statement that an attack on Israel would be viewed as an attack on the U.S. Moreover, strength means not only military power, but a strong economy as well. His approach to the challenges we face from China is to “outgrow them,” pointing out that if the U.S. grows at 5% a year on a $14 trillion economy, and China grows at 10% a year on its $6 trillion economy, the U.S. will still add more output per year than China.
Cain also understands the importance of a strong and stable dollar to U.S. leadership in the world. Having the dollar as the currency of record in international commerce gives U.S. companies a competitive edge, and gives the U.S. the soft power that comes from making possible the spread of freedom and prosperity throughout the world.
Social issues do not rank as high in importance for me as they understandably do for many voters. Cain’s pro-life stance is sincere and fully consistent with his faith and respect for the dignity of the individual. His approach to immigration recognizes the need to secure the border, and then to move forward with an immigration policy that is in the interest of the U.S.
Cain presents himself as a problem solver. But I say this is too modest. He is a leader with a clear sense of the importance of liberty to the success of the American economy and its centrality to American exceptionalism.
Herman Cain’s belief in the importance of the family, and the ability individuals to take care of themselves within the voluntary structures of the community at large, is grounded in his own life story. He grew up Atlanta in the 1950s and early 1960s when drinking fountains were labeled white and black, and blacks had to ride at the back of the bus. His father was a chauffeur, his mother a maid.
He was poor in economic terms, but rich in family and ethics of life. His parents taught him to take responsibility for his own life and to never be jealous or envious of those who had more. Through hard work, determination, risk taking, problem solving and leadership, he ultimately became the CEO of Godfather’s Pizza, CEO and President of the National Restaurant Association, chairman of the Federal Reserve Bank of Kansas City, motivational speaker and radio talk-show host. He brushed death but survived cancer and today is a man totally comfortable within his own skin, a man who knows who he is and in my judgment is fully capable of being President of the United States.
When we vote for an individual to be President, it is an act of trust. I choose Herman Cain because his policies would lead to a more prosperous, more secure America and a more just society. I trust Herman Cain to be President because he trusts liberty and the American people to move America forward to the great nation it aspires be.
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