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What lessons can Americans learn today from a man who was President almost a century ago? Quite a bit, as it turns out.
In a lecture titled “The President Who Said No: Debt, Temperament and Calvin Coolidge’s Lessons for Today,” delivered Wednesday evening on the campus of Southern Methodist University, Amity Shlaes explained to a full-house audience that lessons from the presidency of Calvin Coolidge could solve many of the toughest challenges facing our country today. Shlaes is a senior fellow at the George W. Bush Institute, director the 4% Growth Project, and author of the new book, “Coolidge,” an authoritative biography of America’s thirtieth president. Wednesday evening’s lecture was the third in a lecture series on presidential history sponsored by the Center for Presidential History at SMU.
Perhaps the greatest challenge facing our country today is the state of the federal budget. The federal budget was an issue of particular concern in the 1920s too, as the country had just emerged from WWI with considerable debt. Luckily there was a leader, Calvin Coolidge, who cared deeply about budgets. Shlaes shared with the audience one particularly telling Coolidge quote:
"I believe in budgets. I want other people to believe in them. I have had a small one to run my own home; and besides that, I am the head of the organization that makes the greatest of all budgets, that of the United States Government. Do you wonder, then, that at times I dream of balance sheets and sinking funds, and deficits, and tax rates, and all the rest? Yes, I regard a good budget as among the noblest monuments of virtue. It is deserving of all emulation."
But Coolidge did not just dream of “balance sheets and sinking funds,” he made prudent budgeting a core principle of his presidency. The evidence of this is crystal clear. When Coolidge left office in 1929, the federal budget was smaller than when he assumed the presidency in 1923. That is a feat that few other presidents can claim.
Achieving this required a great deal of discipline, and the ability to say “no.” The incentives of elected office are such that politicians are accustomed to saying “yes.” But when Coolidge was approached for favors from the federal purse, he almost always replied “no.” This made Coolidge few friends in Washington, Shlaes told the audience, likening him to something of a Scrooge.
To Coolidge, this kind of budget discipline was essential. It was even a moral issue, but on a practical level, without budget restraint, tax cuts would not be possible. To highlight this point, Shlaes shared a story about presidential pets. In the 1920s, President and Mrs. Coolidge were given twin lion cubs as a gift from the country of South Africa. President Coolidge promptly named the cubs “Budget Bureau” and “Tax Reduction” to make his priorities clear and send a message that balancing the budget and cutting taxes must always be thought of together.
Beyond the naming choices of his pets, Coolidge took other concrete steps to keep the federal budget in line and enact tax reform. He took care to see that the White House’s own budget was in order, he demanded that his cabinet secretaries cut the budgets of their departments, and he consistently vetoed large spending bills that Congress sent for his approval. Even after Coolidge achieved a balanced budget, and indeed had a surplus of funds, he continued to meet with his budget director every week to find new ways to shrink the budget further.
With a sound budget in place, Coolidge was able to give Americans the gift of tax reform. Coolidge and treasury secretary Andrew Mellon cut the income tax rate, first into the 40% range, and then all the way to 25%. This rate was lower than even what Ronald Reagan was able to achieve in his landmark tax reform of 1986.
Coolidge’s leadership allowed the country to prosper. Unemployment fell and the economy experienced strong growth. Indeed, over the span of his presidency, economic growth averaged 3% to 4% on an annual basis. Coolidge was America’s “great refrainer,” as Shlaes often asserts, but indeed a refrainer who begat plenty.
It is this kind of growth that America needs today. After all, 4% growth on a sustained basis would unleash unprecedented opportunity for America and the rest of the world. If the presidency of Calvin Coolidge is one model to achieving growth, one wonders if his blueprint could be applied today. In closing her prepared remarks, Shlaes posed this very question to herself, and concluded with optimism, “YES.”
This post was written by Matthew Denhart, Research Assistant to the 4% Growth Project at the George W. Bush Institute. Previously he was administrative director of the Center for College Affordability and Productivity.
Matthew Denhart is an expert on immigration policy and is the author of the Bush Institute’s America's Advantage: A Handbook of Vital Immigration and Economic Growth Statistics, now in its third edition. He currently serves as executive director of the Calvin Coolidge Presidential Foundation and is a founder of the Coolidge Scholars Program which provides full-ride merit scholarships to America's most promising college students. A summa cum laude graduate of Ohio University, Denhart has written and spoken widely on a variety of policy topics including the economics of higher education, labor, and taxes. He has contributed articles to numerous national publications including The Wall Street Journal, Forbes.com, CNN Opinion, and Bloomberg View.Full Bio
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