Keys to Prosperity by 4pHbs4

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									-Keys to Prosperity-

    Stephen Moore
                The Greatest Story Never Told
                            S&P 500: Nominal vs. Real Price Appreciation
                                   January 1960 – October 2010




1960     1965      1970      1975      1980      1985       1990        1995       2000        2005         2010

 Past performance is no guarantee of future results.    Source: Laffer Associates, Monthly Report based on Data
                                                        from Standard and poor’s.
                                  Share the Wealth?
Top Marginal Income Tax Rates and Income Tax Share for the Top 1% of Earners
                                 1970-2006




                     Top Marginal Income
                          Tax Rate




                                                                                                                                                    Tax Share
   Tax Rate




                                                                                                       Top 1 Percent Income
                                                                                                             Tax Share




              1970   1973 1976         1979      1982 1985 1988                1991 1994           1997 2000 2003 2006
      Past performance is no guarantee of future results.
Source: Internal Revenue Service, Statistics on Income, “Number of Returns, Shares of AGI and Total Income Tax, AGI Floor on Percentiles in
Current and Constant Dollars, and Average Tax Rates,” Table 1. Available at: http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html
“In short, it is a paradoxical truth
that tax rates are too high today
and tax revenues are too low and
the soundest way to raise the
revenues in the long run is to cut
the rates now.”
 - John F. Kennedy
 Bottom 95 Percent Pays Less than Top 1 Percent

                                                           Share of Income Taxes Paid
70.00



60.00



50.00



40.00                               Top 1 Percent
                                    Bottom 95 Percent



30.00



20.00



10.00



  0.00
         1986         1988        1990        1992         1994        1996        1998         2000        2002         2004        2006
  Past performance is no guarantee of future results.
Source: Internal Revenue Service, Statistics on Income, “Number of Returns, Shares of AGI and Total Income Tax, AGI Floor on Percentiles
in Current and Constant Dollars, and Average Tax Rates,” Table 1. Available at:
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html
                 Rich Pay More Than Their Fair Share
                                            2007 Income and Income Tax Shares




 Past performance is no guarantee of future results.
Source: Internal Revenue Service, Statistics on Income, “Number of Returns, Shares of AGI and Total Income Tax, AGI Floor on Percentiles
in Current and Constant Dollars, and Average Tax Rates,” Table 1. Available at:
http://www.irs.gov/taxstats/indtaxstats/article/0,,id=133521,00.html
                  The Laffer Curve
           0%




                       Normal Range
Tax Rate




                      Prohibitive Range




           100%

                         Tax Revenue
                              The Laffer Curve
             Real Federal Revenues and the Top Marginal Income Tax Rate




   1960      1965      1970      1975      1980       1985     1990       1995        2000       2005

                                                       Source: Office of Management and Budget, Historical Table
Past performance is no guarantee of future results.    1.1, Available at
                                                       http://www.whitehouse.gov/omb/budget/Historicals
                           Inflation Rate, 1950-2010




                                                      Source: Bureau of Labor Statistics, Consumer Price Index,
Past performance is no guarantee of future results.   Available at: http://www.bls.gov/data/#prices
                     Show Me The Money?
Year on Year Monetary Base Growth, bi-weekly, percent, Through August 2009




                                                      Source:Federal Reserve Bank of St. Louis, Monetary base Growth,
Past performance is no guarantee of future results.   Available at: http://research.stlouisfed.org/fred2/series/BASE
                            10 Year Treasury Note Yield
                                        October 1955 to February 2009



                                                15.7 Peak




   1962 1966         1970     1974      1978     1982     1986      1990      1994      1998 2002          2006      2010
                                                          Source:U.S. Treasury Department, Treasury Yield Curve Rates, Available at:
Past performance is no guarantee of future results. http://www.treasury.gov/resource-center/data-chart-center/interest-
Education and Medical Prices Skyrocket While Import Prices Drop
                              CPI, Percent Change, 2000 to 2009



      80%
                            70%

      60%
                                                   50%
                                       44%
      40%
               24%
      20%


       0%
                                                               -5%             -6%
      -20%


      -40%
                                                                                            -39%
      -60%


      -80%
                                                                                                          -76%

     -100%
              All Items   Education   Medical     Energy       New           Apparel      Software     Computers
                                       Care                   Vehicles

                                                                         Bureau of Labor Statistics, Consumer Price
             Past performance is no guarantee of future results.         Index, Available at:
       Source: BLS                                                       http://www.bls.gov/data/#prices
                           Worker Well-Being

      Index, 1980=100
160


150                                                                   Per Capita Income



140

                                                                                 Total Compensation
130


120

                                                                                          Wages and Salary
110


100


90
      1980   1982   1984   1986    1988    1990    1992   1994   1996     1998     2000     2002     2004     2006

                                                          Based on data from the Census Bureau and the Department of Labor.
 Past performance is no guarantee of future results.
   Number of Years It Took for Major Technologies to
           Reach 50% of American Homes



           iPods         4

   DVD Playe rs          5

Inte rne t Acce ss               10

     CD Playe rs                  11

           VCRs                   12

    Ce ll Phone s                      14

           Cable                       15

      Color TVs                             18

             PCs                            19

         Radios                                       28

      Ele ctricity                                                                52

     Te le phone s                                                                               71

                     0       10             20        30          40         50        60   70        80
   Source: Heritage Foundation                        Years Since Introduction

Past performance is no guarantee of future results.
Guns and Butter: Discretionary Spending Explodes
                    1992-2010




        1992       1994       1996       1998      2000       2002       2004      2006       2008   2010


  Past performance is no guarantee of future results.
 Source: Congressional Budget Office, Historical Budget Data, Available at: http://www.cbo.gov/
                     The Stimulus and Jobs




Past performance is no guarantee of future results.
                           Hog Wild Spending
                                    Federal Outlays, 2001-2008




Past performance is no guarantee of future results.
 Source: Free Enterprise Fund
                         The World Really is Flat
                           Flat Tax Nations and Their Rates


               Albania             10            Kyrgyzstan     10
               Bulgaria            10               Latvia      25
           Czech Republic          15             Lithuania     27
               Estonia             21              Macedonia    10
               Georgia             12              Mauritius    15
              Guernsey             20             Montenegro    15
             Hong Kong             15               Mongolia    10
               Iceland            35.7          Prednestrovie   10
                 Iraq              15               Slovakia    19
               Jamaica             25               Romania     16
                Jersey             20                Russia     13
             Kazakhstan            10               Ukraine     15

Source: Center for Freedom and Prosperity
                Free Countries are Wealthier and Healthier




Past performance is no guarantee of future results.
  High Corporate Taxes Make the U.S. Uncompetitive
              U.S. Corporate Tax Rate v. Average for Developed Countries




Past performance is no guarantee of future results.
                                Real Federal Funds Rate
                                 January 1990 – September 2009



5.00

4.00

3.00

2.00


1.00

0.00


-1.00

-2.00


-3.00

-4.00
   Jan-94 Jan-96 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12
Past performance is no guarantee of future results.
Gold Shows Dollar Weakness and Inflation Risk
                                    January 1971 – November 2010


            Nixon/Ford     Carter           Reagan       Bush          Clinton          Bush    Obama
               276%        316%              -28%         4%            -19%            236%     45%




        1971      1975          1980       1985        1990     1995             2000   2005   2010

 Past performance is no guarantee of future results.
                         GOP Bull Market
     Dow Jones Industrial Average, November 1992-November 1996




Nov-92      May-93      Nov-93        May-94           Nov-94   May-95   Nov-95   May-96   Nov-96


 Past performance is no guarantee of future results.
                             Dollar at Record Lows
                             Dollar Index, August 2000 – November 2010




                2000 2001        2002     2003     2004   2005        2006   2007   2008 2009   2010

Source: Federal Reserve Bank, Nominal Major Currencies Dollar Index
 Past performance is no guarantee of future results.

								
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