Do you think the low umemployment, low inflation and high tax revenue vindicate the Bush tax cuts?

Question

Should they remain permanent?

Answer 1

Most economists agree that, while the tax cuts did not hurt, they weren't the driving force behind the economy for the past few years. They helped grease the wheels a bit but the main engines of the economy were innovation and worker productivity.

However, many economists are worried about the deficits that we have be running since 2001.

I am for keeping the tax cuts in place if we cut spending down to where we have a balanced budget.

Answer 2

No, they don't vindicate the tax cuts. We had low unemployment, low inflation, and high tax revenue before the tax cuts, and we also had a budget surplus. Bush has been on a spending binge and created a huge budget deficit. The economic impact of the tax cuts, together with many other things that have been happening, including the war in Iraq, China's rapid growth, the increase in the price of oil and many others create complex interactions that affect the economy. Without the tax cuts, we might have been better off, but it is impossible to say. We certainly would have been better off without the Iraq war, which has now cost in excess of $500 billion dollars. Think what that money could have done for our economy if it had been used here instead of squandered on the war.

Answer 3

Republicans exagerrate the effect of taxes on the economy. In 1993 they said higher taxes would trash the economy and we had a huge boom. They claim tax cuts in the early 1980's fueled the turnaround later in the decade, but the huge drop in interest rates and energy prices were the major stimulants. The tax cuts probably helped, but they left a legacy of monstrous deficits.

The recession in the early 2000's was pretty mild by any standard, but it was combated by the Fed implementing the easiest money policy in decades, if not in its entire history. That was a massive stimulus to the economy.

Republicans used to care a lot about monetary policy and how it could affect the economy. Now the government is hiding the main measure of money supply and the GOP propaganda machine is ignoring monetary policy and running a disinformation campaign to give tax cuts as much credit as possible. They also approve of the fact that the concentration of wealth in this country has accelerated dramatically, in part because of Republican tax policies. They've also added massive complexity to the tax code, a violation of supposed Republican principles.

I would favor scrapping all tax law changes from the last 15 years and replacing them with simple, coherent policies where there is a concensus they are beneficial. For example, why do we need health savings accounts? Why can't Congress be fair and rational and just make all unreimbursed medical expenses deductible, with some reasonable threshold like 1% of AGI? And why is the IRS now going after deductions for coins dropped in Salvation Army pots? Where are the government-is-evil harpies on this one? This is a classic case of government out of control, but Republicans don't seem to care because it's their executive branch that's screwing up.

Answer 4

No, on all counts. Real income has nose-dived under his ill-advised programs. Who cuts taxes during wartime? Only an IDIOT, that's who!

Don't put Ron Reagan on too high a pedestal, either. His tax cuts nearly crashed the economy completely. Inflation rocketed to unheard of levels and interest rates shot into the stratosphere as a result. Home mortgage rates exceeded 17% in some parts of the country for folks with 'A' credit. Energy prices also shot through the roof; gasoline was the equivalent of nearly $4 per gallon in today's dollars. We won't even discuss how he screwed the pooch on AIDS. Had he responded appropriately to the early threat it would not be the scourge that it is today in parts of the world.

Answer 5

The Bush tax cuts should definately remain in tact.So many people forget Reagan in the early eighties,how his administration had a 3% tax cut 'right accross the board".It not only stabilized the economy but got people to start spending their money.An econony where the public doese'nt spend is a 'sluggish' one.If the house and senate vote down the Bush cuts,the country would start to go into a ptre-recession,spending less than what they do even now.It's simple economics..spend to keep the money circulating,thus lowering the chances of recession.Even if its 10 or 15 bucks a week on a new garbage can or something,at least the money would be circulating out there.

Answer 6

Of course not. The Piper must be paid eventually, and the national debt has literally skyrocketed under Bush. FYI, net tax collections under Bush have barely increased since the Clinton years.

Answer 7

God no! You forgot to mention a ballooning budget deficit though. We haven't had a budget surplus in any of Bush's years of office, and it doesn't look like we will in his last years either.

Answer 8

Why do we have to vindicate tax cuts?! You are missing the point. It is MY money, so it is ALWAYS a good thing when the government is kind enough to let me keep some of it!

Geez, thank God I can vote for Ron Paul!

Answer 9

Heck yes. I belive that reduction in taxes across the board is generally a good thing.

I wrote a couple articles on my personal finance website dealing with this issue. Check out the link I provided.