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Wednesday round up: Danker and The Economist on China; Lehrman on transitioning to gold; The NY Sun says Paul won the debate.

From Forbes, Rich Danker explains the Chinese trade deficit is more a function of the dollar’s reserve status than currency manipulation.

The Economist notes that as China’s currency has risen, so has its trade deficit.

At The Washington Examiner, Lew Lehrman summarizes the steps to get to a gold standard.

On The Kudlow Report, a panel discusses Herman Cain’s rise in the polls:


The NY Sun argues US Rep. Ron Paul (TX) won last night’s debate due to his monetary answers.

At a press conference, Cain doesn’t sound like a monetary reformer:

“Representative Paul wrote a book called ‘End the Fed.’ I believe we can fix the Fed,” Cain said. “Because when I ask the Ron Paul people, ‘what would you replace it with?’ they don’t have an answer.”

Cain said he is falsely accused of opposing an audit of the central bank.

“As far as auditing the Fed, in the vernacular of my grandfather, I does not care,” he said, quickly slipping into the third person. “But what Herman Cain has said is, ‘It’s not going to be one of my top issues … If members of Congress were to get together and bring me legislation to audit the Fed, I’d sign it. But I don’t have a problem with it. Now, that being said, you don’t need the president to sign a bill to audit the Fed. Representative Paul sits on a committee that already has that authority!”

On International Liberty, Dan Mitchell scrutinizes Cain’s 9-9-9 tax plan.

Politico features an analysis of Cain’s tax plan by supply-sider Gary Robbins, who predicts it would stimulate strong growth (h/t: Bretton Woods Research).

At First Trust, Brian Wesbury and Robert Stein see reason for economic optimism.

The WSJ quotes from Larry Lindsey’s The Growth Experiment (1990):

[The Economic Recovery Tax Act of 1981] did not pay for itself as some of the most enthusiastic supply-siders claimed it would. Personal income tax collections were lower under ERTA than they would have been had tax rates never been cut. . . . However, the reductions in very high tax brackets easily paid for themselves and produced a rather sizable increase besides. This increase helped finance a large part of the reduction in taxes from lower- and middle-class taxpayers. Though this is not what some enthusiastic supply-siders predicted during the political fight for the tax cuts, it is what basic supply-side theory would predict. . . .

Putting theory to one side for a moment, were the Reagan tax cuts a good idea? More specifically, could the country afford them? By 1985, at a revenue cost in that year of $33 billion, economic output was between 2 and 3 percent higher than it would have been without the tax cut. That extra growth stands for millions of new jobs and a higher standard of living. Moreover . . . the tax cuts had salutary effects on inflation, investment, and savings and contributed only marginally to the deficit.

By the standards of government programs this one would have to be judged a bargain.

In The WSJ, Peter Wallison blames federal programs but not the weak dollar for the subprime mortgage mess.

At Slate, William Saletan notes Mitt Romney’s liberal answers in last night’s debate.

The WSJ suggests the latest economics Nobel Prize was for supply-side economics:


The Atlas Sound Money Project reports on last week’s Heritage conference on a stable dollar.

At COAL, Paul Krugman argues Keynesianism has been validated by the current crisis.

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