Let’s take a leisurely stroll back in time. All the way back to 2001! The US economy was in the middle of a mild recession and we had a new president who wanted to stimulate the economy by cutting taxes.
His initial proposal was $1.6 trillion, which was popular with the majority but did not fly with the minority party at all (who argued it was not very stimulative and would add enormously to the debt). In the end it was argued down to a $1.35 trillion dollar tax cut, and 5 Senators in the minority broke with their party to vote for the plan.
That president was George W. Bush and the majority part was the Republicans. For more deja vu, consider that Bush even went on a cross-country townhall meeting campaign to drum up support for the tax plan.
Epilogue: The White House and Republican majority pushed additional tax cuts through in 2003.
So I’m left wondering, why is the $787 billion stimulus an egregious waste when the opposition party (now lecturing us on the horrors of deficit spending) added about $1.8 trillion to the national debt during a milder recession? I’m confused, because the tax cuts arguably did little to stimulate the economy, worsened the income gap in our country, and–here’s the kicker–drastically cut federal revenue needed to pay off existing debt.
Some will argue “that’s in the past, the Republicans today are different and we need to focus on solutions.” True, but don’t act as if the party that exploded the national debt can lecture us on deficits with a straight face. This isn’t even about Bush, it’s about the Republicans trying to save face and regain political power.
Tags: 2001, 2003, Bush, Democrat, George W. Bush, Obama, Republican, stimulus, tax cuts
February 15, 2009 at 5:46 pm
These tax cuts generated record revenues, but the stupid Congress spent like maniacs. Tax cuts create revenue. It has been proven over the years.
February 15, 2009 at 6:24 pm
Wouldn’t it be nice if that were true? I’d love it if we could all pay less taxes and still have more revenue!
Unfortunately in real life that doesn’t work out. One quick paper I found on the subject: http://www.cbpp.org/3-8-06tax.htm
And I could find hundreds more. The idea that tax cuts pay for themselves is magical thinking.
Look at this chart: http://en.wikipedia.org/wiki/National_debt_by_U.S._presidential_terms
It looks at national debt/GDP (takes into account changes in growth) by Presidential term. From Reagan to Bush, the idea that tax cuts trigger growth to offset their disastrous drop in revenue proves false.
If tax cuts pay for themselves, how come every Republican since the 50s except Eisenhower (and one term of Nixon) significantly increased the deficit while *every* Democratic president since the 40s has reduced the national debt/GDP?
Everyone wants tax cuts, but the facts show that they *do not* “pay for themselves.”