.Just as FDR's soak-the-rich policies did not work in the 1930s to end the Great Depression, similar policies by President Barak Obama and congressional Democrats will not work today in restoring to us a vibrant economy. A look back in time to the early 1920's will show us a free market, supply-side plan
that does work. In the aftermath of the Great War (WW1) the US economy hit the skids in 1920, with joblessness
hitting almost 12% in 1921, and the national debt ballooning to more than $20 billion. President Warren Harding recruited industrialist and financier Andrew Mellon, the third richest man
in the US, to devise a plan to boost investment without incurring more debt. Mellon's philosophy to end the severe recession in the early 20s was what we call today supply-side economics. In his book Taxation, The People's Business, Mellon noted, "It seems difficult for some to understand that high rates of taxation do not necessarily mean large revenue to the Government, and that more revenue may often be obtained by lower (tax) rates." After Mellon became treasury secretary in 1921, he led the charge to reduce the highest tax rate from 74% to 24%, and the lowest rate from 4% to 1/2 of 1%. Mellon's tax-cutting policy produced the greatest period of economic growth in US history up to that point, a time we now know as "The Roaring 20s." During the six years President Calvin Coolidge was in office (1923-29), unemployment averaged 3.3% and inflation 1% -- the lowest misery index of any president in the 20th century. Furthermore, Mellon's views that lower tax rates bring in more revenue for government were proven correct: in the early 1920s, when the highest rate was 73%, the total income tax revenue was a little more than $700 million. In 1928-29, with the top rate slashed to 24%, the total revenue topped $1billion. In addition, under Mellon's stewardship at the Treasury Department, the United States had a budget surplus from 1923-29. We would be wise to follow the proven Mellon plan today in order to start our economic recovery plan. With our national debt increasing by leaps and bounds, high taxation will be a horrible burden for our children and grandchildren, and it will drastically eat away at our future economic growth.
