To Save America, by Newt Gingrich: on Budget & Economy
Newt Gingrich:
Microlending efficiently gets money to local entrepreneurs
Megabanks versus microlending in poor neighborhoods: Microlending efficiently gets small amounts of money to local entrepreneurs in poor countries. Microlending requires a very inexpensive process of understanding and analyzing
the borrower, analyzing the project, making and implementing a decision to lend, and sometimes advising the recipients.Megabanks, which got into so much trouble during the Wall Street meltdown, could never successfully microlend.
They're too big and too bureaucratic to understand and analyze millions of small entrepreneurs, and they could never afford the cost of analyzing so many loan applications and processing checks.
Now consider this: if big banks are too isolated and too bureaucratic to operate successfully in small, local settings, why would we think big, centralized government bureaucracies could do better?
Source: To Save America, by Newt Gingrich, p. 24
May 17, 2010
Newt Gingrich:
Putting people in houses they can't afford invites disaster
Americans overwhelmingly understand that putting people into houses they can't afford is an invitation to disaster. Yet our government policy has repudiated this common-sense wisdom. Prodded by liberal guilt and a belief among many leaders in
redistributionist, big-government policies, our government adopted ever-more aggressive and unsustainable housing policies. Prospective home owners were told:- If you do not have any credit, government will find a way.
-
If you cannot save for a down payment, government will waive the requirement.
- If you cannot afford to pay the principal, government will give you an interest-only loan for the first three years.
- If you cannot even afford full interest payment,
government will give you a below market rate.
With one person, these policies might tragically lead to bankruptcy. As national policy, they mired millions of families in debt, created a housing bubble, and sparked a financial collapse.
Source: To Save America, by Newt Gingrich, p.145
May 17, 2010
Ronald Reagan:
1981: abandoned Keynesian interventionist policies
In 1981, newly elected President Reagan abandoned long-fashionable Keynesian economic policies--the interventionist, big-government, "stimulus" approach that had produced these dismal results. Instead, he explicitly campaigned on, and then implemented,
four specific economic policy components that became known as Reaganomics:- Tax cuts to restore incentives for economic growth. The top income tax rate of 70 percent was cut leaving just two rates--28 percent and 15 percent.
-
Spending reductions, including a $31 billion cut in 1981. This was close to 5 percent of the federal budget then, or the equivalent of about $180 billion of spending cuts in year nowadays.
- Anti-inflation monetary policy emphasizing the value of
the dollar and restraining money supply growth, which led to much lower interest rates once inflation was tamed.
- Deregulation, cutting red tape, and reducing bureaucracy saved consumers an estimated $100 billion per year in lower prices.
Source: To Save America, by Newt Gingrich, p.158-159
May 17, 2010
Steve Forbes:
We lived in an economic Golden Age from 1980s to 2007
Between the early 1980s and 2007 we lived in an economic Golden Age. Never before have so many people advanced do far economically in so short a period of time as they have during the last 25 years.
Until the credit crisis, 70 million people a year [worldwide] were joining the middle class. The U.S. kicked off this long boom with the economic reforms of Ronald Reagan, particularly his enormous income tax cuts.
We burst from the economic stagnation of the 1970s into a dynamism, innovative, high tech-oriented economy,
Even in recent years the much maligned U.S. did well. Between year-end 2002 and year-end 2007 U.S. growth exceeded the entire size of China's economy.
Source: To Save America, by Newt Gingrich, p.162
May 17, 2010
Page last updated: Feb 25, 2019