"Republicans assert that Barack Obama assumed sole responsibility for the budget on Jan. 20, 2009. From that date, all increases in the debt or deficit are his responsibility and no one else’s, they say.
This is, of course, nonsense – and the American people know it. As I documented in a previous post, even today 43 percent of them hold George W. Bush responsible for the current budget deficit versus only 14 percent who blame Mr. Obama.
In January 2001, the office projected that the federal government would run a total budget surplus of $3.5 trillion through 2008 if policy was unchanged and the economy continued according to forecast. In fact, there was a deficit of $5.5 trillion.
The projected surplus was primarily the result of two factors. First was a big tax increase in 1993 that every Republican in Congress voted against, saying that it would tank the economy. This belief was wrong. The economy boomed in 1994, growing 4.1 percent that year and strongly throughout the Clinton administration.
The second major contributor to budget surpluses that emerged in 1998 was tough budget controls that were part of the 1990 and 1993 budget deals. The main one was a requirement that spending could not be increased or taxes cut unless offset by spending cuts or tax increases. This was known as Paygo, for pay as you go.
During the 2000 campaign, Mr. Bush warned that budget surpluses were dangerous because Congress might spend them, even though Paygo rules prevented this from happening. His Feb. 28, 2001, budget message reiterated this point and asserted that future surpluses were likely to be even larger than projected due principally to anticipated strong revenue growth.
This was the primary justification for a big tax cut. Subsequently, as it became clear that the economy was slowing – a recession began in March 2001 – that became a further justification.
The 2001 tax cut did nothing to stimulate the economy, yet Republicans pushed for additional tax cuts in 2002, 2003, 2004, 2006 and 2008. The economy continued to languish even as the Treasury hemorrhaged revenue, which fell to 17.5 percent of the gross domestic product in 2008 from 20.6 percent in 2000. Republicans abolished Paygo in 2002, and spending rose to 20.7 percent of G.D.P. in 2008 from 18.2 percent in 2001.
According to the C.B.O., by the end of the Bush administration, legislated tax cuts reduced revenues and increased the national debt by $1.6 trillion. Slower-than-expected growth further reduced revenues by $1.4 trillion.
However, the Bush tax cuts continued through 2010, well into the Obama administration. These reduced revenues by another $369 billion, adding that much to the debt. Legislated tax cuts enacted by President Obama and Democrats in Congress reduced revenues by an additional $407 billion in 2009 and 2010. Slower growth reduced revenues by a further $1.3 trillion. Contrary to Republican assertions, there were no additional revenues from legislated tax increases.
In late 2010, Mr. Obama agreed to extend all the Bush tax cuts for another two years. In 2011, this reduced revenues by $105 billion.
On the spending side, legislated increases during the Bush administration added $2.4 trillion to deficits and the debt through 2008. This includes $121 billion for Medicare Part D, a new entitlement program enacted by Republicans in 2003.
Economic factors added almost nothing to increased spending – just $27 billion in total. This is mainly because interest rates were much lower than C.B.O. had anticipated, leading to lower spending for interest on the debt.
After 2008, it becomes harder to separate spending that was initiated under Mr. Bush from that under Mr. Obama. We do know that spending for Part D has risen rapidly – Republicans phased in the program to disguise its budgetary cost – adding $150 billion to the debt during 2009-11.
According to a recent report from the Center for Strategic and International Studies, the unfunded wars in Iraq and Afghanistan increased the debt by $795 billion through the end of fiscal 2008. The continuation of these wars by Mr. Obama added another $488 billion through the end of 2011.
Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 – enough to pay off the $5.6 trillion national debt at the end of 2000.
Tax cuts and slower-than-expected growth reduced revenues by $6.1 trillion and spending was $5.6 trillion higher, a turnaround of $11.7 trillion. Of this total, the C.B.O. attributes 72 percent to legislated tax cuts and spending increases, 27 percent to economic and technical factors. Of the latter, 56 percent occurred from 2009 to 2011.
Republicans would have us believe that somehow we could have avoided the recession and balanced the budget since 2009 if only they had been in charge. This would be a neat trick considering that the recession began in December 2007, according to the National Bureau of Economic Research.
They would also have us believe that all of the increase in debt resulted solely from higher spending, nothing from lower revenues caused by tax cuts. And they continually imply that one of the least popular spending increases of recent years, the Troubled Asset Relief Program, was an Obama administration program, when in fact it was a Bush administration initiative proposed by the Treasury Department that was signed into law by Mr. Bush on Oct. 3, 2008.
Lastly, Republicans continue to insist that tax cuts are highly stimulative, often saying that they add nothing to the debt, when this is obviously ridiculous.
Conversely, they are adamant that tax increases must not be part of any deficit-reduction package because they never reduce deficits and instead are spent. This is also ridiculous, as the experience of the Clinton administration clearly shows. The new C.B.O. data confirm these facts."
Do you understand now what happened to the economy and which party was the most responsible for sabotaging it? Good.
Now read what this commenter had to say about Mr. Bartlett's excellent article:
"Are there really this few comments on this sage, empirically solid article by Mr. Bartlett, a Republican who worked for both Presidents Ronald Reagan and George H. W. Bush?
Moreover, why isn't this article on the front page of the New York Times? Why don't any of the paper's economics reporters lay these facts out so clearly? And why can't a single TV talking head use these same facts--because facts they are, not mere opinions, or misstatements, or lies--to lead and guide a discussion on one of the Sunday news forums? Thank you, Mr. Bartlett, for your fair, informed article. Now, how to get this information to far more people?"
Moreover, why isn't this article on the front page of the New York Times? Why don't any of the paper's economics reporters lay these facts out so clearly? And why can't a single TV talking head use these same facts--because facts they are, not mere opinions, or misstatements, or lies--to lead and guide a discussion on one of the Sunday news forums? Thank you, Mr. Bartlett, for your fair, informed article. Now, how to get this information to far more people?"
Source
54 comments:
Great Post Shaw... now we will see how Silver and RN respond...
Les, in hindsight, was it a good idea for the Dems to raise taxes in 1992 against the advice of the GOP?
As I see it, the evidence says yes, however I have yet to see a single conservative, principled or otherwise, say it was so.
Maybe you will be the first...
Shaw, I reposted this so both of my readers can see it too... my little addition to the blogosphere today...
Have a great one!
Well Dave, O am using lunch as I read this. As time allows I will likely comment.
Until then...
Shaw, informative. I shall enjoy the process of contemplating it further.
What is so wrong with reducing spending. The democrats answer to anything is raise taxes. Tom Coburn has identified billions in waste yet that is not addressed.
Raising taxes for everyone, including the 48% who pay 0 federal income tax, may be necessary but cutting wasteful spending has to come first. If you look over decades one thing becomes clear, politicians from either side will always spend all the money given them and then ask for more because it is never enough.
skudrunner, you apparently missed the part in the Bartlett piece where he reports that it was the GOP that got rid of Paygo:
"Republicans abolished Paygo in 2002, and spending rose to 20.7 percent of G.D.P. in 2008 from 18.2 percent in 2001."
Well Skud, nothing perse is wrong with cutting spending... in fact, as i write, government spending is in fact slowing, if not declining.
Point of fact, public sector jobs, paid for through government spending, is dropping at a rate larger than many believe the economy can survive.
However, like at the family dinner table, there comes a time when you cannot cut any more and someone must look at getting another job to bring in more revenue.
Since we are politically unable to cut Medicare, Social Security or defense, where should we cut?
All the waste in the world is not going to be enough to balance the budget if those items are off the table.
What wasteful spending are you proposing be cut? And how much will that save? Will it balance the budget?
It is clear from your comment that agree with the philosophy of Bush the Younger regarding spending, but please, tell us why the GOP ended PAYGO, a system that was developed in a bi-partisan fashion to control government spending and was in fact working?
PayGo... As ot should be. As it always should have been.
Can we agree it would be a reasonable and rational to start with Coburn's cuts?
Can we agree to significant yet realistic defense cuts, and ending pointless military actions?
Social welfare programs must be on the trimming block as well. Yes?
If so this classical liberal and Objectivist is willing to talk reasonable across the board revenue boosters, ie; tax increase.
When you speak of public sector jobs, of course you are referring to local and state jobs not federal because I'm sure you know that federal employment is up.
"The Obama administration says the government will grow to 2.15 million employees this year, topping 2 million for the first time since President Clinton declared that “the era of big government is over”
Local and state governments are starting to manage the peoples money because they have no choice, it is the federal government that will buy the vote with your money and ask for more.
What happened to the bi-partisan Simpson-Boles deficit reduction that The Leader commissioned and then ignored. Instead of asking to punish the "rich" for their success, why not demand accountability from our elected officials.
I know, far easier to blame the republicans (who are in large part culpable) and punish the "rich" than demand our bought and paid for politicians do the right thing for the taxpayer.
Skud, the Simpson-Bowles plan was DOA from the start because, as you know, the GOP was not interested in any plan that included raising revenues.
As evidence, I point the the debates where every single GOP candidate said a 10 to 1 ratio of cuts to revenue increases was unacceptable.
Also, as a group, none of those candidates, save for Ron Paul, would consider cutting defense spending.
President Obama did not pursue the Simpson Bowles plan because it had no chance of becoming law with the current makeup of the GOP.
At least Les has the good sense to see that PAYGO was good for our country. Why does the party that abolished it, and wiped out our surplus as Bartlett has explained, constantly harangue the Dems for being big spenders?
Les, how does that conversation get started in current day Washington?
Dave,
Wasn't that presented while the democrats had the majority in both houses. I know everything is the GOP's fault but that seems a stretch even for the blame others party.
If I am not mistaken the Simpson-Bowles actually reduced income tax rates which Obama is very much against because he cannot punish the "rich".
Medicare is a sacred cow mainly because the politicians never present the truth they just scare people. Didn't someone propose raising the age to 70 over time while not affecting people 55 and over. I think that was that Ryan guy who was demonized by the left as killing grandma.
The democrats attack any plan the republicans come up with but they never put forth a plan of their own. Is that because it is easier to attack than lead? That's right they don't have a leader since Polosi lost her 757.
if we are going to address the financial problems of the u.s. government then we all must acknowledge it must be done with taxes either in regards to spending or by raising revenues.
if we address it from the idea of raising revenues as most in here would like then we must first do one thing. we must first ascertain whether or not there is a source of revenue out there large enough to deal with the problem. if there is not then we have an even bigger problem.
so, what would be the first step in the ascertaining whether or not that source actually exists?
I like a lot of the Simpson-Bowles suggestions. I was under the impression that the Dems were no more ready to pass Simpson-Bowles than some Repubs. If I remember correctly, six Repubs 'defected' but that shouldn't be the litmus test.
On another note, we can point to growth after '94 and '00 but I think it's fair to say that the first growth spurt was partially or largely based on the tech bubble in the 90s and the second on the housing bubble after 2000.
The deep deep economic trouble here we have today and that and in the eurozone started had it roots in 1998 when Robert Rubin (the driver of the repeal of Glass-Steagall), his man Summers, Grennspan, Graham and Clinton put on a very danerous path. It wasn't Dems or Repubs; it was the immoral underbelly of politics in both parties in Washington that is still present today.
To blame or credit either or both Clinton and Bush is to gloss over the larger picture. We must break up the big six. I love lsitening to Bernie Saunders talk baout this as he spits and gets red faced.
Article by Laffer and Moore , WSJ
http://online.wsj.com/article/SB10001424052702303753904577450910257188398.html
Shaw,
"Aha, Bruce Bartlett said it!" In garishly-highlighted commentary, no less!
You're enamored with Reagan-era advisers? Try googling Pete Peterson, I guarantee you won't like what he says about debt.
First, let's establish the government-provided facts.
I invite you to go to this link and download table 1.3
OMB Data
Let's accept your rules, even though some 2009 spending does belong to Obama and the Democrats due to supplemental spending and stimulus they signed into law with no GOP support.
We'll give Obama years 2010-2013, meaning we must assign Bush 2002-2009.
Obama still incurred more debt in 4 years ($4.1 trillion) than Bush did in 8 ($3.4 trillion), as measured in constant 2005 dollars.
Bush's average deficit as percentage of GDP was 3.4%. Obama's was more than double that at 7.9%.
All that money spent by our government and where is our economy? Still in the toilet.
So my question is, how much government tax collection and spending is enough?
Is there a limit?
And what evidence do you have that government spending spurs economic growth?
WWII? That was wealth destruction. Literally creating things to be blown up, albeit for a noble cause.
The private sector economy did not expand until government took the depression-era and wartime controls off, and our government, still responsible back then, taxed the crap out of everyone to pay off the war debt. A responsible thing to do and something our economy could bear at the time because we were the only industrialized power left standing.
I recommend another link to you: http://www.bea.gov/national/index.htm#gdp
Download the Current Dollar and "real" GDP chart.
In it you will see the economy expanded 30% during Reagan's tax-cutting tenure. It expanded even more, 35% under Bill Clinton, but only expanded 17% under Bush (who inherited a slight economic downturn and the had the post-9/11 downturn).
What's the point? Tax hikes and tax cuts do not exist in a vacuum. Their effects depend on larger circumstances. Reagan cut taxes at a time when they were very high and we were in a recession. Receipts dipped, but then continued rising.
Clinton cut some taxes and raised some, and revenue kept rising. It is telling that revenue collected as a percentage of GDP has remained fairly constant through it all, between 17 and 19 percent, with a fall off to 15% in 2009.
A better, cleared precedent to study is what happened to an already weak economy when Hoover raised taxes. I won't bore you with how that worked out. So we have historical evidence where tax cuts resulted in increased revenue, and tax increases lowered it.
So, another question, given the historical data we have, how do you propose to collect the historically-unprecedented 25% of GDP in revenue that we would need to fund the government liberal democrats want?
Silver, you asked... And what evidence do you have that government spending spurs economic growth?
All spending is economic activity, that contributes to a growing economy. It does not matter if it is private, or public spending.
That is just basic economics. I understand that you probably would say that if the gov't was restrained, the private sector would spend... but that does not mean that public spending does not also contribute to economic growth.
How about a question for you, what empirical evidence is there that tax cuts lower the deficit by increasing economic activity to such a level that the we see growth and shrinking deficits?
"All spending is economic activity, that contributes to a growing economy. It does not matter if it is private, or public spending."
Technically correct, since GDP (an imperfect but universal measure) accounts for both private sector and public spending.
Even though you didn't answer my questions, I will answer yours.
what empirical evidence is there that tax cuts lower the deficit by increasing economic activity to such a level that the we see growth and shrinking deficits?
Your question contains two unrelated parts.
First, Reagan, Kennedy's and Bush's tax cuts all resulted in increased revenue. We also saw continued GDP growth, much moreso with Kennedy and Reagan, not so much with Bush.
So there is your empirical evidence that tax cuts do not have to result in less revenue coming in, and they do not result in lower GDP.
The last part of your question about shrinking deficits cannot be answered by tax cuts alone because there is also a spending component to deficits.
Reagan increased revenue intake and grew the economy but debt still grew. Why? Because government increased spending even more than the increase in revenue.
I am not going to stand here and beat the "all tax cuts all the time" drum because that is not rational. There is a point at which a further tax cut will have no marginal utility.
Now, please answer my questions
* How much government tax collection and spending is enough?
* What evidence do you have that government spending spurs economic growth?
* What happened when Herbert Hoover raised taxes in a down economy? Why would you expect a different result now?
* How do you propose to collect the historically-unprecedented 25% of GDP in revenue that we would need to fund the government liberal democrats want?
If we had collected enough taxes to pay our bills the last 30 years, we would not have a debt problem.
Blame that on Republicans who pander to voters with their "No New Tax" pledges, no matter if it caused multi-trillion dollar debts. Republicans think cutting more taxes will solve the problem. Insane. It's a proven failure, that lower taxes create growth.
We should have an "assessment tax" to pay off the debt, then cut spending. We have a duty to not pass on this debt. We had a duty to build this debt in the first place, but selfishness and greed rule our current culture.
More money: So how do you collect one quarter of every dollar the economy produces?
That is what the federal government would have to collect in taxes just to break even at our current rate of spending.
Silver...
How much government tax collection and spending is enough? I think this is a question for the voters to decide through their representatives. From what I am seeing, most people do not want to see Social Security or Medicare cuts. Even tea party people had “Keep your hands off Medicare signs” and it has been pretty effective at helping older Americans have access to health care. As for Defense, I think many libs, myself included, would like to a significant rollback in those costs. I am not convinced that we need to spend the $$$ we are spending, and I see no need to continue to defend Europe if they are not willing to pony up the costs for their defense. We need to, and we will collect whatever amount we need to meet the needs that the American people want and feel they need.
Overall, I agree that we need a real discussion on what we as a people want to see our Federal Government spend money on, and at what levels, but sadly, I see no way for us to do that in a civil way.
* What evidence do you have that government spending spurs economic growth? Silver, as you said, government spending is economic activity and in the absence of such, that spending is by itself, growth. Many economists believe the lesson of the depression is that we let up on government stimulative spending too soon, thus prolonging the depression when the private sector was unable to put the needed $$$ into the economy.
* What happened when Herbert Hoover raised taxes in a down economy? Why would you expect a different result now? I do not know this answer, although I can assume the economy tanked, or you would not have brought it up. I could just as easily point to the Roosevelt issue about decreased government spending and ask the same question… why would you assume a different result today, than we saw with decreased spending then which resulted in a prolonged down cycle?
* How do you propose to collect the historically-unprecedented 25% of GDP in revenue that we would need to fund the government liberal democrats want? You assume that Dems do not want to cut expenses. Is it possible that they just want to cut expenses the GOP likes, defense for instance?
Once the economy starts to grow again, you know that if we hold the line on spending, the 25% number will shrink to a number that will not be unprecedented. People arguing the percentage game are not being intellectually honest on this. The number is high because the economy has shrunk. The economy has not shrunk because the number is high. Government spending around the country is going down, thus causing economic contraction, driving your 255 number up along with unemployment numbers.
We are in a vicious cycle.
I guess you missed it, an assessment tax that goes only to pay the debt. No gimmicks, no false promises of tax cuts will generate enough, just pay what we should have been paying decades ago.
Americans chose the spending, and chose the tax cuts. Yes, taxation will have to be high until the debt is paid off.
Meantime spending must be cut, but you can't cut taxes before you cut spending. That's the mistake you Republicans made starting with the Reagan tax cuts, but no spending cuts. There was a Reagan recession and it happened after he signed his tax cut bill.
Point is, taxation level has little to do with growth, that's a proven fact.
How do you and your Republicans plan to raise that kind of money? More tax cuts?
The democrats answer is always the same, raise taxes. Maybe reforming the tax system would have better results.
Have everyone pay some tax, eliminate most deductions therefore leveling the advantage the "rich" have. Cut taxes on corporations to what the world market is and attract companies to bring jobs back to the country. Increase jobs therefore reducing the dependence on federal assistance therefore reducing government spending.
That doesn't pander to the more money please class because it does not create a group to hate but it just might work.
Maybe adopt Simpson-Bowles proposal the The Leader commissioned and threw out.
Scumrunner,
Thanks for calling me a hater because I think we should pay off our debt
Dave asked...
"Les, how does that conversation get started in current day Washington?"
T wish I knew the answer to that question.
The reality of the situation, at least in my opinion is no one in Washington from either side of the table wants to talk serious turkey. It is more about politics, getting elected (or reelected), an extreme ideology than it is about solving problems.
Nobody will ever get all they wish for, and realistically shouldn't expect to.
Now tell that to the far left and the far right, those individuals who seem to have control over the agenda.
We have become quite adept in Washington at spinning the wheels and making a lot of noise.
Perhaps it is time those representing us go back to school and study classical liberalism as it was the philosophy that guided the founding of the nation.
There is a lot that has been lost on the supposedly educated leaders of the nation, and we as followers seem to have had a lot lost on us as well. IMO.
Your welcome but I was not referring to you, it is The Divine One who lives in OUR White House that has to demonize a group because he has nothing else to run on.
I agree we need to pay off the debt but spending cuts need to come first and that is just not part of the political equation equation.
You have far to much faith in the government to even think they would just use a special tax to pay down the debt. Remember BJ and Algore when they turned over the SS fund to the general fund so they could have more available to bribe voters.
The only thing you can trust politicians to do is take care care of themselves.
@ Dave: government spending is economic activity and in the absence of such, that spending is by itself, growth.
Right on the first part (Gov spending is economic activity), but wrong on the second part. Government spending is not growth. Were it otherwise, we could simply spend our way out of any economic downturn, and we know from historical facts that that is not so.
I could just as easily point to the Roosevelt issue about decreased government spending and ask the same question… why would you assume a different result today, than we saw with decreased spending then which resulted in a prolonged down cycle?
No you can't. I gave you a provable historical fact. You've just given us speculation. The economy was tanked, so liberals say it stayed tanked because Roosevelt didn't spend enough. Pure unprovable speculation.
Defense is 5% of GDP. Cut it in half and you still need to collect 22.5% of GDP. Now what do you do?
Do you really think you could collect that high of a percentage?
You do realize people can take their money and their businesses elsewhere, right?
Do you think it is wise for us to let the government control so much of the economy?
What makes you think government can spend that money more wisely than private citizens and businesses?
Government spending is not going down, Dave. Responsible states must balance their budgets, but federal spending continues to grow.
And talking percentage of GDP is not intellectually dishonest. By your logic, when the economy contracts, government's piece must increase, that is why I use % of GDP, and I've given you the charts and the data.
You guys are out of answers.
Government spending around the country is going down, thus causing economic contraction, driving your 255 number up along with unemployment numbers.
This is your fundamental flaw. Government spending does not drive economic growth, and government is not a wealth creator or the primary jobs engine, the private sector is.
Again, were it otherwise, all government would have to do to solve our ills is hire everybody.
This is not the Soviet Union. We do not have a centrally-planned economy
"That doesn't pander to the more money please class because it does not create a group to hate but it just might work"
That's not referring to me? You use my moniker in the sentence. Have your fun.
As I see it, the left and right are pointing fingers, and both are able to skew the numbers in their favor. Historians can't even agree on what happened in the 20s and 30s let alone the 90s and the first decade of 2000s. How does that measure up to blog comments?
There are greater forces at work than raising or lowering taxes!
I see no comments on the '98 Rubin/Greenspan fiasco that is killing us. As well, no comments relative to most growth after '94 being due to the tech bubble and most growth after 2000 due to the housing bubble -- or the crashes that followed. These issues have little to do with Presidents or idelogy; more stupidity and greed from both sides. Why all the attention on the left vs right and taxes? We (you and me) lost seven TRILLION in wealth since 2008.
Most of us here are nose to the grindstone workers, parents and tax payors. We have important interests in common.
Did you see Dimon on the Hill? Can you feel that it is not a left vs right issue. This is almost getting comedic. We gone from Rubin and Greenspan to the redicluous Dodd-Frank; 2000 pages of crap. One page: capital requirements.
If my taxes are raised a bit or lowered a bit it will not influence my life the way the crash did in the last couple years. Shouldn't we agree on addressing that first?
I appreciate the discussion here and the effort to understand how and why we're in such an economic mess.
I'm with KP on his assessment. Essentially, our representatives in Congress AND our presidents have failed us.
But more important, we've failed in our duty to make our representatives represent OUR interests. The lobbyists and corporations have a disproportionate influence on law makers, and we're all suffering the consequences of that.
KP's right. I don't think this is a left/right issue anymore, but one of the people vs. the moneyed interests/greater forces.
It's difficult not to be discouraged.
Shaw, for whatever it's worth a great summation!
Keep your eyes on the banksters. The puppet masters who essentially control events.
That's one big, concentrated dose of truth Bartlett dispensed. Good for him, but I don't know how he can go on being called a Republican if he's unwilling to spout the party line of lies and distortions.
"During the 2000 campaign, Mr. Bush warned that budget surpluses were dangerous because Congress might spend them, even though Paygo rules prevented this from happening."
A harbinger of years of perverse idiocy to come. Earning chops as the Worst President in U.S. History takes years of dedicated effort, especially after Coolidge, Harding, Hoover, Nixon and Reagan. But George W. Bush was clearly up to the task of winning that dubious distinction.
(The nonsense about Congress spending the surplus quoted in my previous comment) "was the primary justification for a big tax cut. Subsequently, as it became clear that the economy was slowing – a recession began in March 2001 – that became a further justification."
I'm convinced a key reason, if not the key reason for Bush's huge serial tax cuts was that he was determined not to be a one-term president because of a stagnant economy. That was a big reason his father was a one-term president, and George W. was acutely aware of it. Consequently, Bush and his perverse economic advisers were all about applying stimulus. Thus . . . "The 2001 tax cut did nothing to stimulate the economy, yet Republicans pushed for additional tax cuts in 2002, 2003, 2004, 2006 and 2008."
I disagree with Bartlett on the 2001 tax cut's effect. It was stimulative to the extent of keeping the economy from doing worse than it did.
Silverfiddle wrote: "Reagan, Kennedy's and Bush's tax cuts all resulted in increased revenue. We also saw continued GDP growth, much moreso with Kennedy and Reagan, not so much with Bush."
Comparatively, revenue growth from the Reagan tax cuts marginal at best. The Bush tax cuts utterly failed in that regard (see below). Paul Krugman explains:
"Actually, federal revenues rose 80 percent in dollar terms from 1980 to 1988. And numbers like that (sometimes they play with the dates) are thrown around by Reagan hagiographers all the time.
"But real revenues per capita grew only 19 percent over the same period — better than the likely Bush performance, but still nothing exciting. In fact, it’s less than revenue growth in the period 1972-1980 (24 percent) and much less than the amazing 41 percent gain from 1992 to 2000."
Also see Krugman's Taxes and revenues — another history lesson
As for the Bush tax cuts, econdataus explains:
"The actual numbers and sources can be found at recgro8y.html. As can be seen in the second table and graph, real individual income tax receipts declined 25.06% from 2001 to 2009. Even total receipts declined -13.93% over that period. Finally, real GDP grew just 13.36% from 2001 to 2009. This was the lowest real GDP growth over any 8-year span since 13.33% from 1966 to 1976. Hence, although it's been just about eight years since the 2001 tax cut and six years since the 2003 tax cut, the evidence to this point is that the Bush tax cuts decreased revenues over what they would have been, at least over the short term."
Click the link and scroll down to the last item on the page, which includes a revealing graph, for the full explanation.
KP sums it up well: There are greater forces at work than raising or lowering taxes!
An economy is a complex system and taxes are just one component. The key problem I see is that we've lost control of it and allowed apolitical busybodies to build tottering systems that benefit mainly the rich and well-connected.
S.W.: I already said Bush's tax cut had marginal effects, but Reagan's and Kennedy's did not. They both greatly expanded the economy and also increased revenue.
I provide the charts because Krugman or (pick your conservative commentator) can only get you so far.
Krugman is in intellectually dishonest person (I'm being polite) with an agenda, and he will slice and dice facts to fit whatever he's trying to "prove."
"Real revenue per capita?" What the hell is that? No one uses that measurement.
This is the kind of trick he pulls. Reagan's policies result in an 80% increase in revenue, which is a liberal's wet dream, so Krugman invents something to crap all over it. Not saying his measurement is meaningless, but now he compares apples to his own breed of oranges.
These are the kinds of tricks partisans on all sides play, and unless you dig into the data yourself, you are subject to manipulation.
It is funny to see Dave (not making fun of you!) employ the "government will grow its way out of debt" argument. Liberals derided Reaganites for making the same argument back in the 80's.
When in the modern era has government ever reduced spending?
Everyone has an agenda. Dive into the numbers yourself and you be the judge.
More on Krugman's tricks:
the evidence to this point is that the Bush tax cuts decreased revenues over what they would have been, at least over the short term."
Pure speculation based upon a theoretical statistical model. There is no way to prove or disprove his contention, so it is essentially useless for anything other than rehetoric.
And the Reagan per capita revenue issue he raises is due to Reagan and congress lower tax rates but expanding the tax base, essentially implementing a revenue-neutral tax policy that spread the burden wider, so naturally it would result in per capita taxes going down, but the key result is it raised revenue!
See how Krugman cherry picks fact, slices and dices them to damn something good?
I am not trying to make fun of anyone, simply pointing out how cherry picking statistics and a little rhetoric can turn a silk purse into a sow's ear, and Dr. Krugman, crafty man that he is, is an expert at it.
SF
The good thing about statistics is you can make them show anything you want, kind of like polls, depending on what questions you ask and how how you show the results.
All of the deficit/revenue discussions are interesting but the fact is the US needs to spend less and collect more. If they would reform the tax codes and make them simpler the country could increase revenue while not raising taxes on the "rich" as class warfare.
Have everyone pay their fair share, even if it is small, instead of asking 51% to pay for 100% of federal income taxes.
Being called a hater just because I gave an idea Scumrunner disagreed with, is a personal Ad Hominem attack.
I guess that's OK for the blogs friends, but no one else.
Especially revealing since surfing your blog I saw the post you wrote about comments just a few days ago. Hypocrisy alive and well.
If your rules only count for a few and not all, dump the rules and your fake following of them.
Skudrunner: Do you have a blog? It doesn't show up in your profile...
More,
The Leader has created a group of people to target and blame all of the countries ills on and that is his definition of the "rich". He encourages his flock to hate this group as a distraction from his ineptness. His flock wants more money while contributing none so I just assumed you were a follower. If you took it personal than I apologize because it was not a attack on you.
As to your surfing my blog, would you please let me know the URL because, last I checked, I don't have a blog and if I do I need to visit it.
Silverfiddle wrote: "More on Krugman's tricks:
"'the evidence to this point is that the Bush tax cuts decreased revenues over what they would have been, at least over the short term.'"
If you had bothered to actually read my comment, think about it and follow the links, doing the same, you would realize the above quote is from a different person and site, not Krugman. Obviously, you were in such a rush to crap all over Krugman you let little details like who said what and what it means in context slide by the wayside.
Then, you expect me to accept your charge thag an internationally recognized economist, educator and Nobel Laureate is just making stuff up to suit his political agenda.
Maybe Faux News, CATO and AEI don't (for understandable reasons, perhaps) use real revenues per capita routinely, but that doesn't make it a meaningless or illegitimate measure.
Sorry, Silverfiddle, but you're the sloppy joe in this arena, not Paul Krugman and not the person at econdataus.
skudrunner: "That doesn't pander to the more money please class because it does not create a group to hate but it just might work."
"More Money Please said...
Being called a hater just because I gave an idea Scumrunner disagreed with, is a personal Ad Hominem attack.
I guess that's OK for the blogs friends, but no one else.
Especially revealing since surfing your blog I saw the post you wrote about comments just a few days ago. Hypocrisy alive and well.
If your rules only count for a few and not all, dump the rules and your fake following of them."
MMP, no matter how many times I read skudrunner's comment, I don't come away thinking he/she called you a hater.
I've had to ask people here to not use the words like "asshole," "jerk," and "scum," to address each other because that drags the discussion into the gutter. I also assume people who come here are past their adolescence and can behave like adults.
IMO, skudrunner did not call you a name.
Let's all take that proverbial chip off our shoulders and try to have a good discussion.
Thanks.
No, S.W., I brought facts and candor to this discussion based upon government data I linked to. You are parroting what you don't understand.
It is obvious you don't have command of the facts.
It doesn't matter who said it (and you are committing an appeal to authority logical fallacy), the per capita thing is a diversionary tactic. I didn't say it was incorrect or a lie, just that it was a diversion, and I explained to you why that figure went down. Reagan expanded the tax base. I guess you ignored that.
You called me "sloppy." Please substantiate.
"The second major contributor to budget surpluses that emerged in 1998"
Where were these budget surpluses? I checked the US Govt Treasury Department and I found that the national debt increased every single year. Even during all of Clinton's 8 years.
Silver said: "the per capita thing is a diversionary tactic"
This kind of thing happens when the unaltered, unadorned numbers don't show what someone wants. So they cook the numbers, and this is one of the tactics. Dividing it by something else. Lather, rinse, repeat, until you get the desire results. Then you stop there.
Budget surplus is a buzz word that means nothing for the government.
We spent 75 million on widgets last year so we budgeted 100 million this year and only spent 99 million so we had a budget surplus.
How about eliminating baseline budgeting and show true spending increases.
Clinton had a budget surplus but a spending increase yet what you hear is Bush inherited a budget surplus which means nothing.
Silverfiddle wrote: "Obama still incurred more debt in 4 years ($4.1 trillion) than Bush did in 8 ($3.4 trillion), as measured in constant 2005 dollars.
"Bush's average deficit as percentage of GDP was 3.4%. Obama's was more than double that at 7.9%."
Simple-minded nonsense.
Acting responsibly, Obama put the cost of the wars in Iraq and Afghanistan, plus the high and rising cost of Medicare part D on budget, whereas Bush had put them all on the national credit card. Easily $1 trillion added in first-year deficit costs right thee when you factor in debt service.
You could learn something about recent presidents and patterns of debt in a post at my blog but I doubt you'll bother. You exhibit that special conservative blend of personality traits: being a know-it-all, coming on like a bully and having a sense of entitlement about how your opinions should trump others' facts — ipse dixit personified.
@S.W.: Acting responsibly, Obama put the cost of the wars in Iraq and Afghanistan, plus the high and rising cost of Medicare part D on budget, whereas Bush had put them all on the national credit card. Easily $1 trillion added in first-year deficit costs right thee when you factor in debt service.
Obama did do that, but you are wrong about "off-budget" spending. It still goes against the national debt and deficits. And on-budget still means you have to borrow money. Do you not understand that?
Obama has borrowed almost $5 trillion. He's the biggest spender president in history. You seem psychologically unable to come to grips with that.
On-budget or off-budget, it all gets chalked up as debt, so you've fallen for another liberal trick.
As for the rest of your comments, the psychological projection is stunning.
I did not present opinion, I presented government data.
Based on your poor performance here, why would I go to your blog?
Skud said: "Clinton had a budget surplus"
He ran a deficit each year. How does that mean a surplus?
SW said... "Simple-minded nonsense.
....Obama put....whereas Bush had put them all on the national credit card"
I went to the source: Obama's own Treasury Department. And the cold hard figures on the debt are there. Figures which include the cost of retaliating against the terrorists in Afghanistan. Figures which include all spending and revenue.
And it lines up with what Silver is accurately telling us.
Same as saying Reagan's tax cuts generated income, it means nothing since he left office with a 2.5 trillion dollar debt.
Actually, it means a lot. The first part still means that his tax policies were wildly successful.
The last part, though, points out that he had a major spending problem.
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As for the projected surplus that Bush "lost", it never existed. It came from an agency that, like everyone else, has a poor record of predicting anything. We can look at this same agency and its all over the place "predictions" about OBamacare.
* The two capital letters at the front of "Obamacare" are a result of accidentally leaving the shift key on for the second letter. No, it is not yet another cutesy insult for the President. I have no problem using his exact name.
Reagan's tax plan left us a 2.5 trillion dollar debt and you call that successful?
That kind of convoluted thinking is the reason we are almost bankrupt.
This from a guy who thinks there were WND's in Iraq, even though Bush and the armed services (after a 3 year search) says there were not.
dmarks,
"He ran a deficit each year. How does that mean a surplus?"
Because a budget surplus and a deficit are two different things.
If you budget 100 million towards something and spend 75 million you have a Budget surplus but have increased the deficit by 75 million.
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