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A Tax Cut Straight from the George W. Bush Playbook

As the Senate celebrates passage of its $1.5 trillion tax cut package, Republicans still have a daunting task ahead of them. They’ll have to iron out some significant inconsistencies between the Senate and House bills, as well as settle on what can realistically be achieved. They’ll also have to figure out how to sell what could be their only legislative achievement of 2017 without it succumbing to the usual cries of “tax cuts for the rich!”

Earlier this year, Republicans claimed that tax reform would simplify the tax code. One look at the bill the House rolled out proves this is not true. [1] The GOP legislation accepts the premise of taxing wealthier people more and retains—and actually adds—layers of tax brackets. It does eliminate several popular deductions, which could be seen as a simplification—unless you’re one of the people benefitting from them.

On balance, a tax cut would help grow the economy. The U.S. has the highest corporate tax rate in the developed world at 39.1 percent, so any bill that lowers that number will help boost employment.

But this is also a deficit-financed tax cut—in other words, we’re putting the $1.5 trillion on credit, which we’ll have to pay back over the next 10 years. And that $1.5 trillion tab is a conservative estimate, as the bill actually provides $3 trillion in cuts [2] by sunsetting certain provisions. Republicans are asserting that the cut to the corporate rate will bolster the economy so dramatically that the package will pay for itself. But there are serious reasons lawmakers should be wary of this argument.

First, it was taken directly from the George W. Bush-era tax cut playbook. It seems like ages ago that the government actually had a surplus, but back when it did, President Bush argued [3] that his tax cuts would be paid for with increased revenue from a boosted economy. Federal Reserve Chairman Alan Greenspan agreed, citing [4] the government’s projected surpluses. But that was before the housing market bubble and the Wall Street crash, which caused revenue projections to fall dramatically. Ultimately, the Bush tax cuts were paid for on credit. And that’s a problem because tax bills that are paid for have positive effects on the economy [5], whereas deficit-financed tax cuts have very little to negative long-term impact on growth.

Secondly, more than two thirds of the nation’s debt comes directly from autopilot spending programs. When lawmakers discuss “cuts,” they’re only talking about  discretionary spending—less than a third of overall spending. With an insolvent Social Security trust fund, Congress needs to get serious about the nation’s long-term fiscal health and slash the spending side of the equation. It’s simply magical thinking to believe that our financial problems can be solved by deficit-financed tax cuts alone.

Finally, we need to actually retire debt during times of economic growth, so that if and when the market crashes, we are not drowning in red ink. Interest rates will eventually rise, and somewhere down the road, the global economy may suffer another burst bubble. It’s massively shortsighted to face that future day with over $1 trillion in debt from this tax cut alone.

As the wrinkles in the bill are ironed out in conference committee, some of these issues may be resolved. But the debt problem likely won’t be. Senator Bob Corker attempted to secure a legislative trigger [6] that would have repealed the tax cuts if they caused deficits—but that provision was ultimately left out [7] and Corker voted against the Senate package.

There are significant differences between the House and Senate versions that need to be resolved, including whether individual tax cuts should be permanent, whether to repeal the health insurance mandate, when to enact a corporate tax cut, and how to handle the mortgage interest and state and local tax deductions.

Other provisions are consistent across both bills. Senate lawmakers decided to include a section of the House bill that repeals the Johnson amendment, an unnecessary and unfair penalization of political speech [8] that takes place in churches, religious schools, and other tax-exempt non-profits.

As conference legislation starts to take shape, the question before conservatives is whether its inevitable shortcomings are significant enough to cost their support. Senator Rand Paul, an ardent fiscal conservative, argues that [9] lawmakers should not let the perfect be the enemy of the good. Paul wrote in an op-ed [9]:

I would prefer a larger cut. I would prefer that the Senate bill match the House bill and keep some form of state and local deductions so that no one gets caught in the trap of losing too many deductions at once and failing to benefit from the tax cuts. Lastly, I’d like to see more permanence on the individual side. Some of that is still achievable. Some of it is due to the peculiarities of the budget and Senate rules and will have to wait for another day. The good news is—we can do this every year.

It’s true that the bill could—and should—be better. Having to vote for the least-bad option is one of the most frustrating parts of our current politics. The cut to the corporate tax rate will undoubtedly bolster the labor market and add U.S. jobs, which are significant positives. But lawmakers also need to ask themselves whether that’s worth adding $1.5 trillion to our debt—and whether our heedless and headlong national spending spree will ever come to an end.

Barbara Boland is the former weekend editor of the Washington Examiner. Her work has been featured on Fox News, the Drudge Report, HotAir.com, RealClearDefense, RealClearPolitics, and elsewhere. She’s the author of Patton Uncovered, a book about General Patton in World War II, and is a summa cum laude graduate of Immaculata University. Follow her on Twitter @BBatDC.

47 Comments (Open | Close)

47 Comments To "A Tax Cut Straight from the George W. Bush Playbook"

#1 Comment By Youknowho On December 3, 2017 @ 10:07 pm

Well, the Bush policies did not work that well, didn’t then? I mean, when you take a country that has a surplus, and then tank it to the point that people are wondering if capitalism itself will survive, well, you should take it as an example of what not to do.

#2 Comment By grumpy realist On December 3, 2017 @ 10:16 pm

Guess the supply-siders didn’t learn from Kansas, did they?

The Chinese must LOVE this. We’re making it harder for Americans to get higher degrees and putting a tax on our best research colleges like MIT.

(As of 2014, MIT alumni have launched 30,200 active companies, employing roughly 4.6 million people, and generating roughly $1.9 trillion in annual revenues, which is between the GNP of Russia and that of India.)

And don’t forget–once people stop thinking of the US as a beacon for research and development THEY’LL GO ELSEWHERE. Singapore. Taiwan. The EU. And once we slip into second place or lower, it will be very hard to get the momentum back again.

(Also–how do the Republicans imagine the US military is going to continue to be at the leading edge if we’re not in charge of the top-notch R&D anymore? Do they imagine that they simply need to call up the Technology Fairy?)

Start learning Chinese, guys–you’ll need it.

#3 Comment By Ken T On December 3, 2017 @ 10:46 pm

First of all, while the US may have the highest nominal corporate tax rate of any developed country, it also has one of the lowest rates of taxes actually paid, because the US tax code allows far more deductions.

Secondly, even if it were true that our taxes were higher, how would a tax cut increase employment? US corporations right now are sitting on some of the largest piles of cash in history. They are using it for executive bonuses, they are using it for stock buybacks, or they are just letting it sit in the bank. They have no reason to hire more people because of the simple fact that they are meeting their production demands with the current staffing levels. Why would giving them even more cash cause them to start hiring? I defy you to name one major corporation that is holding back their production because of a lack of cash. No matter how many times you say it, it will never magically become true.

#4 Comment By Anonymous On December 4, 2017 @ 12:02 am

As the Republicans and their donors evidently understand but pretend to forget when the other team controls the government, the deficit doesn’t matter. The national debt is just a convenient procedural argument the minority party invokes because it has a whiff of commonsense plausibility and it’s a lot easier to whine about the deficit than to oppose the majority’s agenda on substantive issues. Notice how the Democrats have suddenly become deficit hawks, whereas I trust no one on this site thinks their handwringing is sincere.

#5 Comment By GregR On December 4, 2017 @ 12:04 am

You know every time I read an article that discusses the top marginal corporate tax rate without also mentioning the effective tax rate it just makes me wonder what else the author is going to lie about.

Yes its true that our marginal rate is the highest in the world, but it is also true that our effective rate is one of the lowest in the developed world. The failure to acknowledge this is the rankest of lies.

#6 Comment By MM On December 4, 2017 @ 12:16 am

“The GOP’s tax package would spike the national debt.”

And the Obama administration’s policies, specifically higher taxes, more regulation and even the sequester, didn’t spike the national debt?

#7 Comment By Realist On December 4, 2017 @ 3:33 am

“The cut to the corporate tax rate will undoubtedly bolster the labor market and add U.S. jobs, which are significant positives.”

There is no provision to force corporations to employ American workers with the savings. They will use the money to buy back stock.
It is a gift to the rich.

#8 Comment By polistra On December 4, 2017 @ 5:10 am

It was passed by a part of the Federal government. That’s enough reason to reject it. Sanity cannot emerge from any part of the Federal government. Only pure destruction and evil.

#9 Comment By Larry On December 4, 2017 @ 7:49 am

“The cut to the corporate tax rate will undoubtedly bolster the labor market and add U.S. jobs, which are significant positives.”

There is no guarantee this is true.

As far as I can see this tax cut bill is a gift to the rich, powerful and corporate at the expense of the American people.

#10 Comment By Christian Chuba On December 4, 2017 @ 7:50 am

I’m certain the deficit will balloon because of spending growth but stop scapegoating social security and medicare. That’s just a way to make the growth in discretionary spending, especially the Defense budget look smaller. The consultant apologists for the Defense budget are expert at that, this is the core competency of the Pentagon.

Our Defense Budget has just jumped from $600B to $700B, if we naively believe that it will stay there, this is an additional $1T over 10yrs.

Regarding Social Security it is 100% funded by the payroll tax. When the trust fund depletes, by statute benefits will be reduced to match the revenue from that source or the payroll tax will be increased like it was in the 80’s. It has never added a nickel to the deficit.

#11 Comment By Youknowho On December 4, 2017 @ 8:41 am

Considering the state in which George W. Bush left the economy, we should consider his actions as “what not to do”

#12 Comment By Johann On December 4, 2017 @ 9:47 am

Both supply side and demand side economics are voodoo economics. In fact, a tax cut without a spending cut when the budget is in deficit is not a tax cut. The govmint still gets its money, although more of it is from selling bonds instead of directly from tax payers. It still competes just as much for people and resources with the private sector.

#13 Comment By john On December 4, 2017 @ 10:36 am

The economy by most measures is humming along quite nicely now. This is not the time for massive stimulus. Actually the gov should ease off the gas, pay down the debt and prepare for the next cycle. As to creating jobs?
I need good analog electronics designers, can’t find them how is this problem affected by the tax rate? I do see that the gov is looking to make education more expensive by taxing tuition waivers, is that likely to increase the supply of highly trained engineers?

#14 Comment By pepi On December 4, 2017 @ 10:55 am

Every non-partisan analysis has said this will not grow the economy much at all and what little it does will be short term while the deficit will drag the economy down in the long term. It will increase income inequality which also drags down the economy and contributes greatly to social unrest. This is the current GOP – ignore the economists and ceos (who say they won’t increase wages but will instead buy back stocks) and everyone else with expertise and do what you “feel” will work in spite of decades of evidence to the contrary.

#15 Comment By John On December 4, 2017 @ 11:04 am

Why do you state “The GOP legislation accepts the premise of taxing wealthier people more”? This bill will result in the wealthy keeping millions more than they are currently helping support the country with.

#16 Comment By Youknowho On December 4, 2017 @ 11:37 am

People who advocate tax cuts for all that ails us have never heard of

a) The law of disminishing returns. Which says that you pay more and more to get less and less. Each time you cut taxes you get less payoff than the last time you did. Face it.

b) The principle of the limiting factor. If something is in short supply, adding more of a different ingredient will not change things. If you are making martinis and you are short of gin, buying more vermouth will not give you more martinis. So, before you start cutting taxes, find out where the bottleneck is, and address it.

These laws are universal. Do not think that repeating “free market” “free market” will exempt you.

#17 Comment By Dan Green On December 4, 2017 @ 11:49 am

As circumstances have unfolded, post the financial crisis, it is clear Central Bankers have no issue with debt, as they have a license to print money.

#18 Comment By b. On December 4, 2017 @ 12:36 pm

The GOP’s tax package is supply-side e-con-nomics.

“But is that reason enough not to support it?”

The GOP’s tax package will not create jobs.

“But is that reason enough not to support it?”

The GOP’s tax package makes individual “relief” temporary to pay for immediate give-aways to corporations and inbred wealth.

“But is that reason enough not to support it?”

The GOP’s tax package is tailored to the bipartisan establishment that Trump claimed to oppose.

“But is that reason enough not to support it?”

There is really no good reason for anybody who is not wealthy, working in the financial industry, or pursuing a political career to support it.

“But is that reason enough not to support it?”

What would be reason enough?
Reason enough to not let them tread on us again and tell us it is for our own good?

#19 Comment By balconesfault On December 4, 2017 @ 12:48 pm

What Realist said.

By all evidence, Corporate America has much much more than enough money to expand and hire domestically if they thought there was money in it.

Tax cuts won’t incentivize them if they don’t see a market. And this tax bill ensures that when the next downturn comes, the Federal Government won’t be spending money to make up for the decline in consumer demand.

If anything – this bill paves the way for future employment declines next time we have a 2008.

There’s a reason only 26% of Americans believe that a tax cut for them personally is worth adding to the Federal Deficit.

Lucky for the GOP all of their donor base falls in that 26%.

#20 Comment By One Guy On December 4, 2017 @ 12:49 pm

Let’s cut the crap. This bill is a gift to GOP donors. The president wants this bill to pass so he can brag that he passed the best, most beautiful tax cut in history. Any other suggestions are insanity.

If I’m wrong, why was the bill passed in the middle of the night, with no opportunity for debate? If it’s a good bill, why not let it stand on its merits?

At least we’re (finally) discussing it here.

#21 Comment By wise_pharaoh On December 4, 2017 @ 1:11 pm

““The GOP’s tax package would spike the national debt.”

And the Obama administration’s policies, specifically higher taxes, more regulation and even the sequester, didn’t spike the national debt?”

Actually it was the loss of revenue due to the economic collapse in 2007-2008. Add the fact we were/are still at war and President Obama put the cost of that war on the books and also couple that BOOM the deficit grew.

There is such a thing as cause and effect….

#22 Comment By PHG On December 4, 2017 @ 1:13 pm

I love how Rand Paul is described as “an ardent fiscal conservative” and proceeds to complain that the cuts are low. Irony is dead.

#23 Comment By wise_pharaoh On December 4, 2017 @ 1:20 pm

“On balance, a tax cut would help grow the economy. The U.S. has the highest corporate tax rate in the developed world at 39.1 percent, so any bill that lowers that number will help boost employment.”

Come on Barbra. Why keep pushing this canard? As many have mentioned above. The effective tax rate, which is what matters, is much lower than that. I fact many big companies at times pay nothing, i.e. Verizon, Apple, Google. Supply and demand is the only thing that drives the economy with regard to why a company will hire additional employees. If the demand is not there there will be no additional employees hired, no matter how mush cash the company has. That’s Econ 101. To give a tax cut to the only sector that has benefited from government policy over the past 10 years is incredible. Guess there are many suckers born everyday.

Additionally, where are those republicans that harped about the deficit for the past 10 years. There screams were deafening. Now total silence!!!!

#24 Comment By EngineerScotty On December 4, 2017 @ 2:05 pm

Don’t worry. While the GOP won’t whine about the deficit today, it will soon be used as an excuse to cut entitlements.

#25 Comment By MM On December 4, 2017 @ 2:28 pm

wise_pharaoh: “Actually it was the loss of revenue due to the economic collapse in 2007-2008.”

Oh, you mean the top 20% of households that derive a larger portion of their income from investments?

This is the same group that, according to the Donkey Party, doesn’t pay their fair share in taxes, yet the federal government relies almost exclusively on to fund the budget.

Ironic…

#26 Comment By cka2nd On December 4, 2017 @ 3:20 pm

This is exactly the kind of dishonest, auto-pilot conservative/libertarian article that could have been posted by National Review or The Weekly Standard. TAC should be better than this.

#27 Comment By bt On December 4, 2017 @ 3:52 pm

This tax cut is a rather perfect demonstration of why the GOP has come to a place that it elected Donald Trump.

The whole premise of this tax cut plan is dishonest. The Repuplicans who are voting for this know that it will create large deficits, as Reagan did, as Bush did. When they say that it won’t, they are lying.

They say the are against deficits, but all they do when given a chance is to create them. And then piss and moan about the debt and try to get Democrats to gut the safety net. Because they are serial liars, and they can count on the GOP voters to believe anything the party says to believe, as long as Sean and Rush go along with it.

So go head, elect a serial liar pussy-grabber with Russian assistance. Lying and cheating is a part of the brand at this point. It makes the snowflakes mad or something like that.

#28 Comment By Bob Koelle On December 4, 2017 @ 5:21 pm

“But lawmakers also need to ask themselves whether that’s worth adding $1.5 trillion to our debt…”
It might be, during an economic downturn. but with 4% unemployment and dropping? This is when debt loads should be lowering, not increasing. I don’t even want to argue about who the winners and losers of this bill are. Fiscal sanity says that we are all losing here. Any tax “reform” should have been revenue-neutral at best.

#29 Comment By Alex On December 4, 2017 @ 9:22 pm

“The Federal Reserve considers a base unemployment rate (the U-3 rate) of 5.0 to 5.2 percent as “full employment” in the economy. Sep 4, 2015″

If the current unemployment rate is less than 5%, where the additional hiring will come from? What is wrong with this picture?

#30 Comment By Mac61 On December 4, 2017 @ 9:23 pm

To paraphrase Richard Nixon, when the Republicans do it, it’s not a problem.

#31 Comment By bt On December 4, 2017 @ 9:39 pm

“This is when debt loads should be lowering, not increasing. I don’t even want to argue about who the winners and losers of this bill are. Fiscal sanity says that we are all losing here. Any tax “reform” should have been revenue-neutral at best.”

—————–

Dear Bob,

You poor fellow, you look like you might be one of these earnest people who live “in what we call the reality-based community, and “who “believe that solutions emerge from your judicious study of discernible reality.”

That’s just not how the GOP rolls any more.

You “will be left to just study what (they) do.”

There is a real emperor’s new clothes sort of reality to how the GOP works, especially now that Trump has turned the dial up to 11. Facts, debate, compromise, analysis, experience – it’s just not part of the program. As long as you pretend that the sky is pink, everything will be fine.

#32 Comment By Tom Usher On December 4, 2017 @ 9:40 pm

The biggest Republican crock of all is that these cuts will cause the economy to grow (didn’t work too well for Georgie, did it?), and that us commoners will profit. Who can believe this nonsense? The economy has been growing for years, yet wages remain stagnant. Health benefits, pensions, vacations—you name it—have been disappearing for years as national Republicans remain committed to the cause of picking our pockets so they and their wealthy friends can get richer still.

Did you catch Hatch’s recent Senate performance on YouTube where he talks about being one of the people? It is precious.

#33 Comment By MM On December 4, 2017 @ 10:33 pm

Alex: “If the current unemployment rate is less than 5%, where the additional hiring will come from? What is wrong with this picture?”

Just a thought, but had real GDP per capita grown by more than the 0.75% it did the past 8+ years, perhaps the labor force participation rate would not be at a 40-year low?

#34 Comment By Youknowho On December 5, 2017 @ 8:27 am

Evidently the author was in a coma in 2008 to see how W’s experiment ended. She came to in 2010 and thought that the situation the country in was the fault of Obama (those feckless Democrats). This is the only way she could have written this column.

#35 Comment By GregR On December 5, 2017 @ 10:34 am

MM,

Do you even bother checking facts with anyone, or do you just make stuff up out of whole cloth?
Read GDP Growth:
Dec 31, 2016 1.84%
Dec 31, 2015 2.02%
Dec 31, 2014 2.70%
Dec 31, 2013 2.66%
Dec 31, 2012 1.28%
Dec 31, 2011 1.68%
Dec 31, 2010 2.73%
Dec 31, 2009 -0.24%
Dec 31, 2008 -2.77%
Dec 31, 2007 1.87%
Dec 31, 2006 2.39%
Dec 31, 2005 3.03%

The primary reasons labor participation is down is because

1) the Baby Boomers are retiring,
2) The younger generation is delaying entering the work force to get an education

But thanks for playing

#36 Comment By MM On December 5, 2017 @ 12:29 pm

GregR: No, I don’t make up facts. You just don’t like my interpretation of them. And I don’t play games:

[10]

2004: Real GDP $13.77 trillion, per capita real GDP $47,000
2005: Real GDP $14.23 trillion, per capita real GDP $48,200, annual growth 2.55%
2006: Real GDP $14.61 trillion, per capita real GDP $49,000, annual growth 1.70%
2007: Real GDP $14.87 trillion, per capita real GDP $49,400, annual growth 0.82%
2008: Real GDP $14.83 trillion, per capita real GDP $48,700, annual growth -1.42%
2009: Real GDP $14.42 trillion, per capita real GDP $47,000, annual growth -3.49%
2010: Real GDP $14.78 trillion, per capita real GDP $47,900, annual growth 1.91%
2011: Real GDP $15.02 trillion, per capita real GDP $48,200, annual growth 0.63%
2012: Real GDP $15.35 trillion, per capita real GDP $48,900, annual growth 1.45%
2013: Real GDP $15.61 trillion, per capita real GDP $49,400, annual growth 1.02%
2014: Real GDP $16.01 trillion, per capita real GDP $50,300, annual growth 1.82%
2015: Real GDP $16.47 trillion, per capita real GDP $51,300, annual growth 1.99%
2016: Real GDP $16.72 trillion, per capita real GDP $51,700, annual growth 0.78%

You say my statement about average annual real GDP growth PER CAPITA was “made up”. Taking the straight average of the above figures, I get about 0.8% per year. Obama’s tenure never even got this above 2% in a single year.

Also, your total GDP growth figures are off. You didn’t average correctly. The BEA does it correctly, so you might learn something over there.

Any comment, sir?

Perhaps you could also cite a reputable source for your claim regarding the labor force participation rate?

Because I can prove that if discouraged workers were included in the official unemployment rate, it wouldn’t be 4%. It would be 8%.

Standing by…

#37 Comment By One Guy On December 5, 2017 @ 1:59 pm

MM:
Bush, from 47,000 to 47,000
Obama, from 47,000 to 51,7000

Hmmm, which is better?

#38 Comment By MM On December 5, 2017 @ 4:54 pm

One Guy: “Hmmm, which is better?”

Well, for an accurate comparison, which I wasn’t arguing for, you have to go back to the beginning of the Bush presidency through the end of 2008.

2000: Real GDP $12.56 trillion, per capita real GDP $44,600

Bush (2001-2008): $44,600 to $48,700, average annual growth 1.15%
Obama (2009-2016): $48,700 to $51,700, average annual growth 0.77%

I don’t put much stock in crediting or blaming a president for ups and downs in the economy, but by all means, if you think Obama was better, so be it.

But if I had to choose which recent president coincided with stellar GDP growth, it would be Bill Clinton.

Compared to the 1990s, there was no Obama boom. Quite the opposite, it’s the weakest recovery in U.S. economic history, as measured by real GDP growth.

#39 Comment By GregR On December 5, 2017 @ 5:48 pm

I see the problem:

In your initial post you referred to “Real GDP,” in your second post you refer to “Per Capita Real GDP.” These things are not the same. See one is just about economic output, the other includes population numbers.

The difference is between how a couple can live quite nicely on $100,000 a year income. But a family with 18 kids is really going to struggle living on $100,000 a year. See the difference? It has nothing to do with economic productivity, and a lot to do with the number of people. They are very different measures.

My numbers by the way were not calculated, I just pulled them from a .gov site. Can’t remember which one, but it isn’t like the data is hard to find. Even GDPP isn’t something you need to calculate it is freely available a lot of places.

As for the labor force. These really aren’t surprising trends, and anyone who is paying attention to major economic markers is or should be pretty failure with them by now.

Baby boomers retiring – [11]

A general analysis – [12]

#40 Comment By Youknowho On December 5, 2017 @ 11:08 pm

@MM

Comparing W. to Obama?

Easy

W. took over a growth economy and led it to a spectacular debacle that had people wondering if it was the end of capitalism. Unlike you, I was not in a coma in 2008 and I could watch pundits hollering “The End is Near, Repent” The economy basically ended up in the ICU, with dire predictions.

Obama took on an economy at the edge of the abyss and put it back to normal, where regular metrics could apply. The patient yes, had broken bones that need to knit, nutritonal deficiencies, and infections. But could breathe without machines, could get up from bed, and mended every day. And there was no dire prognosis on sight.

#41 Comment By MM On December 5, 2017 @ 11:11 pm

GregR: “In your initial post you referred to “Real GDP”

No sir, by original post said “real GDP per capita” up thread, there’s no mistake about that. Average annual is the measure I was referring to.

Do you mind retractijng your original statement, then? I didn’t make up anything, these are government numbers from the BEA.

Whether you think real GDP per capita matters or not, I don’t care. It’s a metric that’s used by the OECD, along with Purchasing Power Parity, to measure how industrialized countries measure up.

And the bottom line is, the last 8 years have shown the worst growth in it since probably the 1930s, despite tax increases, increased regulations, and increased welfare and entitlement spending…

#42 Comment By MM On December 5, 2017 @ 11:16 pm

GregR: And regarding the labor force, are you really saying that 5 million discouraged workers don’t matter? These aren’t retirees or students:

[13]

Charming…

Well, I don’t know if this tax bill will do anything, but I won’t presume to predict the future, good or bad like the rest of you geniuses. If the private sector increases investment spending, labor force participation may very well increase, since there are 5 million people willing to work today IN ADDITION to the 6 million officially unemployed…

#43 Comment By Dale On December 5, 2017 @ 11:46 pm

The Reagan tax cut was a disaster. The Bush tax cut was a disaster. Tax cuts do not create jobs, and do not improve the economy.

Prior to the current recession, the deepest post-World War II economic downturn occurred in the early 1980s. According to the accepted arbiter of the economy’s ups and downs, the National Bureau for Economic Research, a brief recession in 1980 — lasting only six months — and a short period of growth, were followed by a sustained recession from July 1981 to November 1982. The unemployment rate hovered between 7% and 8% from the summer of 1980 to the fall of 1981, when it began to rise quickly. By March 1982 it had reached 9%, and in December of that year the unemployment rate stood at its recession peak of 10.8%. The jobless rate slowly receded over the next few years, falling to 8.3% by the end of 1983 and to 7.2% by the 1984 presidential election. The unemployment rate did not fall below 6%, however, until September 1987.

Reagan tripled the Gross Federal Debt, from $900 billion to $2.7 trillion. Ford and Carter in their combined terms could only double it. It took 31 years to accomplish the first postwar debt tripling, yet Reagan did it in eight.

George W. Bush: Added $5.849 trillion, a 101 percent increase from the $5.8 trillion debt at the end of Clinton’s last budget, FY 2001. Most of this was from his tax cut plans and the cost of unnecessary wars.

George W. Bush inherited 4.2 percent unemployment in January 2001. That rate had grown to 7.8 percent when he left office eight years later and hit 8.3 percent in the first full month of Obama’s presidency. It hit a high of appx 10%, until Obama’s and congress’ budget took effect in October of 2009.

The 2009 deficit soared to $1.4 trillion which was the result of Bush’s budget. during the next 8 years the budget deficit decreased by more than 50%.

[14]

#44 Comment By Dale On December 6, 2017 @ 12:01 am

GDP is not the best measure of how the economy is doing. In a period of positive economic growth, usually, you would expect a rise in real wages and higher pay. However, it is not guaranteed. GDP measures wages, but also profit, interest and rent. Therefore, it is possible for GDP to increase but average wages to stagnate and even decline. – e.g. if profit takes a bigger share of GDP.

Real median wages have been stagnant since at least 1980, despite real GDP per capita which is 78% higher now than then. Real median wages are only 5% higher. In a normally developing economy, one would expect real GDP per capita and real wages to move together, growing at similar rates and certainly not diverging. But that has not been the case in the US since Reaganomics. Real wages did increase from about 1997 until 2002 and again from late 2008 to early in 2009.

[15]

#45 Comment By MM On December 6, 2017 @ 12:40 pm

Dale: “George W. Bush: Added $5.849 trillion… the 2009 deficit soared to $1.4 trillion which was the result of Bush’s budget.”

The fact remains, that the debt under President Obama grew from 80% to 105% of GDP *after* the recession ended, with all his tax increases and regulations added, $2 trillion *more* than President Bush:

[16]

[17]

And candidate Obama voted for Bush’s budgets, including the big bank and auto bailouts, 19 spending bills in total.

Comment, sir?

Dale: “GDP is not the best measure of how the economy is doing.”

Right, of course, because it doesn’t really matter that difference between the average annual real GDP growth rate during the Clinton years (3.9%) vs. the Obama years (1.5%) was $1 *trillion* with all the accompanying federal, state, and local tax revenue that went with that.

I’m sorry, but that’s pure garbage. Real GDP, per capita or not, is a very good measure of how the private economy is doing.

#46 Comment By MM On December 7, 2017 @ 10:20 am

Dale, comment?

If you’re going to go full Obama acolyte, you’re going to have to address his dubious fiscal record…

#47 Comment By DSterling On December 10, 2017 @ 3:39 pm

Some of these comments seem like some people actually believe that the Bush tax cuts caused the recession. If that’s the case let’s just recession-proof ourselves forever with 95% tax rates. Housing bubble? What housing bubble?