The Road to Prosperity by US Senator Patrick Toomey

I was hiking the trail this week with Pennsylvania Senator Patrick J. Toomey.  Actually, I listened to his audio book while I hiked on the Big Dry Creek Trail.  You may not be familiar with him, but he was a Pennsylvania congressman, then the president of the Club for Growth, and has been a US Senator since 2010.  With all that going on, he still found time to write the book, The Road to Prosperity: How to Grow Our Economy and Revive the American Dream. 

Anyway, as we walked on the trail, Toomey told me that capitalism is under attack by leftists who want to remake the United States into a European-style welfare state.   He said that the Obama administration's corporate bailouts, excessive spending, and sweeping expansion of government interference in the private economy are undermining our economy and the hopes and dreams of future generations.   He believes that history suggests these policies—if left unchecked—will prove disastrous.

So, he wrote The Road to Prosperity as his call for a return to the principles that support economic growth, individual opportunity, and freedom.  He started out the book by listing the four most important things needed for freedom and prosperity. They are: private property rights; a relatively unfettered free market; low tax burden and government spending levels; and a stable currency.  He examines these four basic points in detail and then returns to them throughout the 254 pages of his book.  He said they are yardsticks he uses to judge whether a government policy will be successful or flop big time.


Throughout our walk together, Toomey argued that we should cut taxes, reduce government spending, and end the government micro-management of banks, carmakers, and other troubled companies.   I asked for specifics, and he recommended a simple, three year moratorium on corporate taxes or a two year, 50% reduction in payroll taxes which would cost the same as the stimulus bill but would provide far more stimulus to the economy. And instead of propping up failing companies with taxpayer money, my buddy Patrick asserted we should allow these companies to file for bankruptcy and reorganize, which would free up investment capital for new, more promising enterprises.

Toomey talked in a philosophical manner about the principles that are the foundation of economic prosperity, namely: respect for property rights, free markets, restrained government spending and taxation, and a stable currency. He then discussed these principles in context of historical events, demonstrating that adherence to these principles has generally produced positive results, while violation of these principles has created negative outcomes.  

Toomey then gave me a history lesson.  He blames the Federal Reserve's monetary policy for the Great Depression.  He says President Franklin Roosevelt (FDR) prolonged the Depression of the 1930s by interfering in free markets and chilling investment.  On top of this, there were large amounts of loans made in the 1990s and afterwards that had high default rates.  Many mistakes made during the Great Depression were repeated.  While a conservative, Toomey gives the Republicans their just due for Bush's extravagant spending and Republican elected official's other unwise policy decisions.  Toomey agrees with the claim that the 2008-2009 economic crash was caused by the Federal Reserve Bank's keeping interest rates too low.  As I listened to Toomey, it seemed to me that President Obama is making many of the same mistakes as FDR.

Toomey told me that he was providing a counter-argument to the Obama adminstration's big government/nanny state agenda.  Just as in Roosevelt's case, Obama is demonizing "The Rich" and the results will prove to be exactly the same with one possible exception. This time, the rich with their wealth will not stand still for being the villain when they are the heroes behind the economy. "Capital goes where it is welcome and stays where it is well treated." And in this global economy, the chilling effect of the current government's attack on entrepreneurs and investors everywhere will result in capital moving overseas in the blink of an eye. Manufacturing and jobs will follow that capitol offshore. The economy will be deprived of investment as well as permanently losing manufacturing jobs.

Toomey also provided me with his plan for Social Security. He recommends privatizing it by creating individual accounts.  The problem with that solution is that "personal accounts would lead to larger near-term deficits in the Social Security system, and these deficits should be financed through borrowing."   Yikes, we have already borrowed way too much.

Toomey devoted a chapter to school choice and argues that a free market approach to eduction would benefit students and ultimatly better prepare American for international economic competition.  School choice vouchers are his solution to the problems with education.

Toomey also provided me with his recap of the financial crisis of 2008. Beginning with the Community Reinvestment Act that was passed in the 1970s through the Troubled Asset Relief Program of 2008, he walked me through the small problems with public policy decisions that led up to the near collapse of the financial system.  Finally, he discussed the causes behind the economic meltdown of 2008 -- most of which were government induced -- and argues that the policy responses by both the Bush and Obama Adminstrations have been wrong-headed and counterproductive.   It was rather scary.

Toomey concluded by saying that he doesn't believe all is lost yet, but it may happen faster than people believe.  That was very scary.

I thought that the best take away from this book is how the free market works best without government intervention.  I said that I agreed that the free enterprise system is not perfect, but it is better than anything else available.   We both agreed that governmental tinkering in the past has either caused many of our financial troubles or made them worse.

I told the senator that I thought his book is a good review of free market economics and a powerful statement about what we need to do to reverse the present course and re-invigorate the American economy.   I thanked him for his insightful exposition of today's economic problems and his spirited defense of capitalism.  I told him that I would recommend The Road to Prosperity as a good read with some excellent suggestions as to what we need to do to revitalize our economy and restore the American Dream.  


We parted company, and I continued on the trail wondering if anyone in Washington DC would take the time to read this book.