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We remember when it was like it was Morning in America. The possibilities seemed endless and the country was buzzing with optimism. Today, the opposite is true.
If we want to pass on the American dream to future generations, we must return to the formula that has always made America thrive: respect for liberty and dedication to the public good.
To thrive, people need the freedom to pursue their dreams in business, government, or politics. When we began our careers – one in medicine and the other in business – we enjoyed a new birth of freedom in the way people viewed the role of government.
After decades of high taxes, onerous regulations, and ever-increasing government spending, we suddenly had leaders in Washington who understood that the heavy hand of government was only making our problems worse and that the American people needed freedom to pursue your passions.
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Ronald Reagan’s solution to the “stagflation” of the 1970s was to cut taxes, allowing people to keep more of their income and incentivizing them to be more productive. In 1981, the Economic Recovery Tax Act lowered income tax rates across the board and reduced the capital gains tax rate from 28% to 20%.
Under Reagan, tax rates fell to their lowest levels since the “Roaring Twenties” – with similar results. Real GDP growth climbed to 7.2% in 1982 and remained historically strong throughout the decade.
Unfortunately, taxes are currently rising as the Trump tax cuts expire. Although the income tax rate reductions will last through 2025 and could be further extended by Congress, other tax incentives, such as Opportunity Zone tax credits, are already being phased out .
We know where this road leads. Under the Obama-Biden administration, characterized by higher taxes and heavier regulations, GDP growth averaged just 1.62%. Last year, GDP growth was a meager 1.9%.
Remembering the nine most dangerous words in the English language spoken by Ronald Reagan: “I’m from government and I’m here to help,” government regulations also play an important role in our economy. Regulations act like a hidden tax, making it harder for businesses – especially small businesses – to grow (or even maintain).
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President Reagan understood that responsible regulation meant balancing the interests of all stakeholders, including business owners and the people they employ.
One of Reagan’s first major acts after taking office was to apply cost-benefit analysis to federal regulations, saving the country more than $10 billion a year – at a time when President could still shock the nation with references to “a billion with a ‘b'”. “.
Today we are going in the opposite direction. During Joe Biden’s first two years in office, his administration added about $1.2 thousand billion – with a “t” – in regulatory costs.
Papa John’s could never have succeeded as it did without the tax cuts and deregulation of the Reagan era. How many other businesses with the same potential as Papa John’s in the early 1980s are struggling today simply to survive because they can’t afford the high taxes and heavy regulations imposed by the federal government today?
Besides, how many young adults have difficulty simply establishing themselves in life? High real estate prices are not only annoying for young people: they raise the bar for potential entrepreneurs, so much so that many people cannot even dream of starting a small business.
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In the 1980s, house prices were relatively affordable, despite the high interest rates needed to combat persistent inflation caused by the Keynesian excesses of previous decades. Low interest rates and economic growth contributed to a surge in housing prices in the 1990s and early 2000s, leading to a housing bubble whose burst marked the start of the Great Recession.
Under the Trump administration, the Department of Housing and Urban Development managed to keep housing prices stable, allowing people to make long-term plans and feel more secure in their pursuit of the American dream.
We’ve spoken with students across the country, and we see unbridled enthusiasm for America despite the country’s economic challenges. Young people want to succeed, but they know they face an uphill battle.
Many students we speak with aspire to help their country through public service. That’s why the American Cornerstone Institute has launched a major initiative to provide future public servants with the training, guidance and encouragement they need to achieve their dreams.
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We hope these patriots will help usher in a new dawn for America, pushing the federal government toward greater respect for liberty and, in turn, unleashing the American spirit of entrepreneurship once again.
But before that can happen, we must again view public policy through the lens of liberty. A prosperous country is one that gives its people the freedom to work, save, invest and spend their money as freely as possible.
That means making Trump’s tax cuts permanent and restoring Opportunity Zones and other tax credits to their full value. It also involves keeping regulators in check and ensuring they fully justify each new regulation while vigilantly monitoring opportunities to eliminate regulations that are no longer useful or necessary.
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At the same time, we must dramatically reduce government spending to combat inflation and, since human flourishing requires fossil fuels, pursue a comprehensive energy strategy that will make it less expensive to sustain future economic growth. .
It can be morning again in America and the American dream can survive – but only if our government returns to its founding ideals of respect for liberty and dedication to the common good.
CLICK HERE TO READ MORE FROM DR. BEN CARSON
CLICK HERE TO READ MORE FROM JOHN SCHNATTER
John Schnatter is the founder and former chairman and CEO of Papa John’s International.