Brazil's Tax-Cutting, High-Growth Socialists

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Investors Business Daily:

Free Markets: Unemployment in socialist Brazil has hit a record-low 4.6%, the government said Thursday, two days after it proposed a $15 billion tax cut. So why can't the U.S. elect socialists who deliver such results?

The short answer is that Brazil, now 10 years under socialist rule, has learned lessons about taxing the rich, spending, drilling for oil and defending the currency since its earlier socialistic days of runaway inflation, high taxes and low growth.

In short, it knows that free-market reform works.

Brazil's free-market changes largely began with the presidency of centrist Fernando Henrique Cardoso in 1995. He cut the size of government as a share of the economy, strangled inflation, opened markets and privatized state-owned industries to pay bills.

That policy is basically still in place in Brazil. Growth is projected at 4% this year, along with a near-full employment picture.

Cardoso was followed by another socialist: Luiz Inacio Lula de Silva.

Despite his hard-left background, Lula added tax cuts, drilled for oil and paid off the International Monetary Fund — in addition to his well-noted social programs that never exceeded his government's ability to pay.