In the midst of the global financial crisis, Poland's economy is forecast to grow by almost 1 percent. According to business economists and the Economist magazine, Poland likely will be the only European country with a growing gross domestic product in 2009. Germany's GDP is expected to shrink by more then 5 percent, Britain's by almost 4 percent, France's by 3 percent and the Czech Republic's by 3 percent. With a projected GDP drop of about 3 percent, the United States doesn't look any better.So how is Poland effecting this "miracle?"
Facing down the global economic crisis, leaders in Warsaw have slashed marginal tax rates, cut government spending and temporarily suspended some government regulations.What? How can this be? Our President says: "Economists on the left and right agree that the last thing the government should do during a recession is cut back on spending." I would love to know with which economists "on the right" the President consulted but it wouldn't matter to the Poles. They're stubborn, you know.
On Jan. 1, Poland cut its top marginal tax rate from 40 percent to 32 percent - and that's just a start. Last year, Polish Prime Minister Donald Tusk announced plans to move to a flat-tax rate of 19 percent in 2010 or 2011. What Poland understands is the importance of the marginal tax rate. The less you take from each additional zloty (the Polish currency) that people earn, the harder they work, the more they invest and the bigger the economic pie becomes.Whence these idiotic notions cutting regulations, taxes and spending?
Poles who suffered under communist central planning don't believe more government is the answer to an ailing economy. An old Polish proverb warns: "Do not push the river, it will flow by itself." That's one of many lessons Mr. Obama and his advisers could learn from this rare, growing European nation.They could but won't, it goes against everything they were learned. By economists. On the left and right. College perfessers and all that.