“The present estimated margin between public receipts and expenditures for this fiscal year is very small. Perhaps the most important work that this session of the Congress can do is to continue a policy of economy and further reduce the cost of government, in order that we may have a reduction of taxes for the next fiscal year. Nothing is more likely to produce that public confidence which is the forerunner and the mainstay of prosperity, encourage and enlarge business opportunity with ample opportunity for employment at good wages, provide a larger market for agricultural products, and put our country in a stronger position to be able to meet the world competition in trade, than a continuing policy of economy. Of course necessary costs must be met, proper functions of the Government performed, and constant investments for capital account and reproductive effort must be carried on by our various departments. But the people must know that their Government is placing upon them no unnecessary burden.”

— Calvin Coolidge

1920s, Second State of the Union Address (1924)

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Calvin Coolidge 412

American politician, 30th president of the United States (i… 1872–1933

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“Anybody can reduce taxes, but it is not so easy to stand in the gap and resist the passage of increasing appropriation bills which would make tax reduction impossible. It will be very easy to measure the strength of the attachment to reduced taxation by the power with which increased appropriations are resisted. If at the close of the present session the Congress has kept within the budget which I propose to present, it will then be possible to have a moderate amount of tax reduction and all the tax reform that the Congress may wish for during the next fiscal year. The country is now feeling the direct stimulus which came from the passage of the last revenue bill, and under the assurance of a reasonable system of taxation there is every prospect of an era of prosperity of unprecedented proportions. But it would be idle to expect any such results unless business can continue free from excess profits taxation and be accorded a system of surtaxes at rates which have for their object not the punishment of success or the discouragement of business, but the production of the greatest amount of revenue from large incomes. I am convinced that the larger incomes of the country would actually yield more revenue to the Government if the basis of taxation were scientifically revised downward. Moreover the effect of the present method of this taxation is to increase the cost of interest. on productive enterprise and to increase the burden of rent. It is altogether likely that such reduction would so encourage and stimulate investment that it would firmly establish our country in the economic leadership of the world.”

Calvin Coolidge (1872–1933) American politician, 30th president of the United States (in office from 1923 to 1929)

1920s, Second State of the Union Address (1924)

“The next most pressing problem was the better ordering of the finances of the Nation. Our Government was costing almost more than it was worth. It had more people on the pay roll than were necessary, all of which made expenses too much and taxes too high. This inflated condition contributed to the depression which began in 1920. But the Government expenditures have been almost cut in two, taxes have been twice reduced, and the incoming Congress will provide further reductions. Deflation has run its course and an era of business activity and general prosperity, exceeding anything ever before experienced in this country and fairly well distributed among all our people, is already at hand.”

Calvin Coolidge (1872–1933) American politician, 30th president of the United States (in office from 1923 to 1929)

1920s, Toleration and Liberalism (1925)

“On the scale on which [tax cutting] is being tried, I'm a little apprehensive. I'm all for reduction of government expenditures but to anticipate it by reducing the rate of taxation before you have reduced expenditure is a very risky thing to do.”

Friedrich Hayek (1899–1992) Austrian and British economist and Nobel Prize for Economics laureate

in "Business People; A Nobel Winner Assesses Reagan", The New York Times (1 December 1982)
1980s and later

“Balancing fiscal and monetary policies is a problem. If you do just one thing, it is not necessarily enough—neither monetary policy alone nor fiscal policy alone, and neither tax cuts nor expenditure increases alone. You need to mix policy. By having the right balance, you can get high employment and stable prices.”

Lawrence Klein (1920–2013) American economist

"Keynsianism Again: Interview with Lawrence Klein", Challenge (May-June 2001)

“Tonight Vietnam must hold the center of our attention, but across the world problems and opportunities crowd in on the American Nation. I will discuss them fully in the months to come, and I will follow the five continuing lines of policy that America has followed under its last four Presidents. The first principle is strength. Tonight I can tell you that we are strong enough to keep all of our commitments. We will need expenditures of $58.3 billion for the next fiscal year to maintain this necessary defense might. While special Vietnam expenditures for the next fiscal year are estimated to increase by $5.8 billion, I can tell you that all the other expenditures put together in the entire federal budget will rise this coming year by only $0.6 billion. This is true because of the stringent cost-conscious economy program inaugurated in the Defense Department, and followed by the other departments of government. A second principle of policy is the effort to control, and to reduce, and to ultimately eliminate the modern engines of destruction. We will vigorously pursue existing proposals—and seek new ones—to control arms and to stop the spread of nuclear weapons. A third major principle of our foreign policy is to help build those associations of nations which reflect the opportunities and the necessities of the modern world. By strengthening the common defense, by stimulating world commerce, by meeting new hopes, these associations serve the cause of a flourishing world. We will take new steps this year to help strengthen the Alliance for Progress, the unity of Europe, the community of the Atlantic, the regional organizations of developing continents, and that supreme association—the United Nations. We will work to strengthen economic cooperation, to reduce barriers to trade, and to improve international finance.”

Lyndon B. Johnson (1908–1973) American politician, 36th president of the United States (in office from 1963 to 1969)

1960s, State of the Union Address (1966)

“It was the FLP that was committed to reducing the cost of doing business and started by lowering the cost of utilities, and requested the commercial banks and lending organizations to reduce their fees, charges and interest rates. The FLP also moved to reduce public expenditure, which saw a saving of $96 million in its year in office. It was also the FLP, which lowered interest in Housing Authority home loans from 12 per cent to 6 per cent for those on lower incomes. It was the aggregate effect of this and a range of other measures of tight fiscal control, investment in key growth areas and a firm hand on curbing corruption that saw the economy record an unprecedented growth of 9.6% in 1999.”

Mahendra Chaudhry (1942) Fijian politician

Reaction to Prime Minister Laisenia Qarase's address to the Fiji Employers Federation in Nadi, 4 September 2005

“In my opinion the Government can do more to remedy the economic ills of the people by a system of rigid economy in public expenditure than can be accomplished through any other action. The costs of our national and local governments combined now stand at a sum close to $100 for each inhabitant of the land. A little less than one-third of this is represented by national expenditure, and a little more than two-thirds by local expenditure. It is an ominous fact that only the National Government is reducing its debt. Others are increasing theirs at about $1,000,000,000 each year. The depression that overtook business, the disaster experienced in agriculture, the lack of employment and the terrific shrinkage in all values which our country experienced in a most acute form in 1920, resulted in no small measure from the prohibitive taxes which were then levied on all productive effort. The establishment of a system of drastic economy in public expenditure, which has enabled us to pay off about one-fifth of the national debt since 1919, and almost cut in two the national tax burden since 1921, has been one of the main causes in reestablishing a prosperity which has come to include within its benefits almost every one of our inhabitants. Economy reaches everywhere. It carries a blessing to everybody.”

Calvin Coolidge (1872–1933) American politician, 30th president of the United States (in office from 1923 to 1929)

1920s, Second State of the Union Address (1924)

“What saved the economy, and the New Deal was the enormous public-works project known as World War II, which finally provided a fiscal stimulus adequate to the economy's needs.”

Paul Krugman (1953) American economist

Op-ed, "Franklin Delano Obama," New York Times, November 10, 2008 http://www.nytimes.com/2008/11/10/opinion/10krugman.html
The New York Times Columns

“Nothing could be further from the truth than the claim that we have a choice between cutting tax and cutting unemployment, for the two go hand in hand. It is no accident that the two most successful economies in the world, both overall and specifically in terms of job creation—those of the United States and Japan—have the lowest level of tax as a proportion of GDP. Reductions in taxation motivate new businesses and improve incentives at work. They are a principal engine of the enterprise culture, on which our future prosperity and employment opportunities depend.”

Nigel Lawson (1932) British Conservative politician and journalist

Speech http://hansard.millbanksystems.com/commons/1986/mar/18/income-tax in the House of Commons (18 March 1986)

“I am talking about the accumulated evidence of the last 5 years that our present tax system, developed as it was, in good part, during World War II to restrain growth, exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment, and risk-taking. In short, to increase demand and lift the economy, the Federal Government's most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures. [...] While rising demand will expand imports, new investment in more efficient productive facilities will aid exports and a new economic climate could both draw capital from abroad and keep capital here at home.”

John F. Kennedy (1917–1963) 35th president of the United States of America

Source: 1962, Address and Question and Answer Period at the Economic Club of New York

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