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In Britain the Labour Party Is Embracing Supply Side Economics!

What a contrast between the tax and spend Democrats in the U.S. and the British Labour Party – which is abandoning its traditional “soak the rich” policies. Maybe that’s because Britain is teetering on the cliff of recession.

The hero here is Rachel Reeves, who will become Treasury Secretary if Labour wins this year’s election. In a major policy speech last week she compared the economic ailments facing Britain to those of Margaret Thatcher:

“As we did at the end of the 1970s, we stand at an inflection point, and as in earlier decades, the solution lies in wide-ranging supply-side reform to drive investment, remove the blockages constraining our productive capacity, and fashion a new economic settlement, drawing on evolutions in economic thought.” Call us gobsmacked at her call for “supply side” solutions.

One driver of this growth message: if present trends continue, the former Communist nation of Poland (which is growing at 3.6% a year) will be wealthier than stagnant Britain in 2030.

This new embrace of a growth vision from the Labour Party is happening at the same time that the Biden Democrats in America are sprinting to the radical socialist left.

Biden has proposed raising almost every tax on the rich: the highest income tax rate, the corporate rate, the capital gains rate, and the dividend tax, while proposing a new wealth tax on unrealized capital gains. Reeves promises no wealth taxes or increases in capital gains tax or the top income tax rate of 45 percent. She wants to relax rules on building in the Green Belts that surround British cities.

The free-market Adam Smith Institute calls many of Labour’s ideas “serious, innovation-focused, positive.”

We’d like Ms. Reeves to travel across the pond and share some of her ideas with Janet Yellen.

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