Are Bush's Tax Cuts Really Stimulating the Economy?

Question

The Administration has reduced its economic growth projections but is still arguing that its tax policy is stimulating the economy. President Bush is now touting projections that the federal budget deficit for fiscal year 2007 will be only $205 billion as proof. The projections came Wednesday in the Mid-Session Review from the Office of Management and Budget. The Center on Budget and Policy Priorities rightly points out that revenues have increased, reducing the deficit from its high of $413 billion in 2004, but that always happens in an economic recovery, and usually revenues increase by more (by around 12 percent, as opposed to the 3 percent increase that we've seen since the beginning of this economic cycle in 2001). What's more, revenue increased by 16 percent in a similar period in the economic cycle during the 1990s after taxes were increased. Finally, the Administration actually reduced its growth forecast for this year from what it projected back in February.

The only thing we would add is that the real deficit is bigger than $205 billion. The Mid-Session Review clearly indicates (on page 32) that the Administration will borrow $180 billion from the Social Security Trust Fund this year to keep the total deficit as low as $205. Social Security is projected to collect $180 billion more in payroll taxes than it will pay out in benefits this year. Social Security was changed back in the 1980s to collect a surplus that would make it easier to pay benefits later on, when the baby boomers retire in large numbers and more Social Security benefits must be paid out. The Social Security Trust Fund is essentially the accounting mechanism that keeps track of this, and it was never intended to be used to make budget deficits appear smaller than they really are. Not counting the Social Security surplus, this year's budget deficit is really $385 billion.
http://itsyourworld-changeit.blogspot.com
http://www.ctj.org

Answer 1

No, his tax cuts only give the rich so much more power in the
Great United States. Their not going to spend these Tax Cuts just put them in and make themselves a fatter bank account. While the poor people struggle to survive, they strive to get richer, their Bush families big friends,.

Answer 2

Taxes cuts do nothing to really stimulate the economy. Job growth and capital spending by business is not increased by tax cuts. Tax cuts increase profits to stock holder, which will have a very small effect on the over all economy. Spend is what stimulates the economy. Most of the spending in this county is from the average Joe and the government, people who make less than 100k a year and government cover over 75% of the money spent to buy goods. with the higher middle class jobs leaving the county and the cutting over government spending for everything from roads to schools. It is a wonder that we are not in a major depression. That may be why we are still in Iraq bush has a hole to funnel goods into so we can make more to replace them. Wars work that way some of the time but they are less effective than spending that money here at home.

Answer 3

This economy doesn't look too stimulated to me.

All the 'positive' news about the economy I ever see get's contradicted the next dayin the market reports. People can't afford homes, and that means they can't sell homes (that's caused cause and effect, for those of you who don't 'get' economy)... all jobless and inflation statistics are outright fabrications meant to serve the people who want to keep the public mystified. Widespread layoffs are an unquestioned reality, any new jobs these dispossessed workers might find are trade-down in salary and dignity.

The only people doing well are the jackals and the vultures that gather around the king jackals and vultures who occupy our executive branch.

Don't let anyone lie to you and tell you that there isn't a global market meltdown in the works. Our prime trading partner, China is a totalitarian state that sells us corrupted goods, and the only products we seem to produce profitably are entertainment and distraction.

...now if you want to tell me how great the economy really is, don't bother. I live in a city that used to be an engine for good paying jobs. It shared with Chicago the distinction of being an economic hub.

No one can afford to live here, and the job market is mostly dipshit service work that could never sustain a New Yorker's expenses. I tire of the lies. Let's get honest. Our economy has tanked. And cutting taxes further for the rich isn't going to help. The last round of tax cuts for those cretins got us where we are today.

Answer 4

the present stimulus equipment is fairly like a tax shrink. yet instead of a rebate that's in actuality asserting "right here take your a refund we are completed employing it for now" we bypass the section the place the government takes it and instead bypass away it in the palms on the guy at first. i think of their situation lies extra with the actuality that the media is making a mountain out of a mole hill and the congress offered into it. I understand the housing industry is down and gas costs are up yet thinking the activities international huge that have taken place over the final 8 years we've an extremely solid base of an monetary device.

Answer 5

How is your buying power? Mine has decreased significantly. Granted it has been going down since the 60s but it is going down exponentially since 2001.

Instead of spending money on a war where things get blown up and must be replaced, very expensive things, and a defense department that is not accountable for much of what it spends.

This link will give an idea of what the national debt really is.

The estimated population of the United States is 302,804,411
so each citizen's share of this debt is $29,665.41.

The National Debt has continued to increase an average of
$1.44 billion per day since September 29, 2006!

http://brillig.com/debt_clock/

Answer 6

To sit there and claim that Bush's tax cuts are stimulating the economy is at the very least, an over-exaggeration. The economy is far more complicated and to make such claims is ignoring this fact. The major contributor to boosting the economy is cash flow. Without cash flow, I don't care how low taxes are, lack of taxes isn't going to do squat.
And several huge events have occured in recent years to boost that cash flow.
Consumer confidence decreased on September 11th, and is slowly increasing as we put distance between September 11th and the present.
FEMA spending on Katrina, no matter how wasteful, it boosted cash flow dramatically.
War, there probably isn't any one event that can boost cash flow more than war, as the federal government begins purchasing large amounts of goods and services from the private sector.
Increasing the amount of monthly payment on revolving credit agreements. While harming anyone who was lingering in debt that was just managable before this happened, it still benefits companies to coollect on debt much quicker, as it adds to in hand capital. This alone would be enough to mask minor economical problems.
Taxes
The only thing reduced taxes is doing, is allieviated some of the problems that would otherwise occur as a result of higher fuel and energy costs. We acquired these tax breaks, just so we could give them to fuel and energy companies.

If our taxes where so high, that they were hendering the economy, that would be one thing, but they aren't. To effect the economy much, it would have to be on the state level for some of the higher taxed states to reduce their own.
When most of larger businesses are multinational corporations, that recieve the biggest benefit from reduction of taxes, the saved income isn't guaranteed to be used in America. Considering that many of them are looking for cheaper labor in other countries, I doubt I would be exaggerating by saying a majority of the revenue saved by them, isn't even staying in our economy.

Even the laffer curve, that people who make such claims like to reference as proof that lower taxes boost the economy, has been proven to not indicate most of the important factors that complicates the situation far greater than the laffer curve represents.

Answer 7

Overall, NO. Also in those budget reports you state there is one factor you fail to mention. The $650 billion spent on the war in Iraq is not factored into those projections. Add it in and you can see Bush policies have driven the US into dangerous areas of deficit. Since the tax cuts were aimed at the very rich, that is where you might see some minor help. The other 90% of the country has little to no benefit.

Answer 8

Tax cuts have not only been used by Republicans to stimulate growth. JFK for instance. And if I remember right, the Dems were all screaming about how the tax cuts were going to only hurt the economy. It hasn't happened. The economy isn't what the government gives away. It's the balance between our spending money and making money. Us, the people. As for growth slowing down? It better, that's why the Fed rate is increased. To slow down growth. Our government on the other hand has not slowed down it's growth enough. SS - Medicare and all the other social programs continue to grow and if uncontrolled, no tax rate will meet the demand of these programs. More money in our hands to spend on goods that our companies make and sell, create more taxes and keeps us all in jobs. Less money on the other hand does what?

Answer 9

I didnt read much of what you said, but what I do know is that the Federal Reserves has been pumping money into the banking sytstem. Where did they get this money? Out of thin air. The inflation tax is increasing and our country is borrowing more money than ever. Any current economic progress we see is through borrowing and inflation...Cutting taxes is good, but we need to drastically cut taxes and spending as suggested by 2008 president candidate Ron Paul. To quote Ron Paul--"If I borrowed a million dollars every month, my personal finances would be pretty good, but eventually the bill is going to come in." I believe as many others do that the value of the dollar and the economy is going to collapse soon.
umm,.. i.
buy gold to prepare to economic collapse.

Answer 10

Not my economy I'm broke.

The Bush tax cuts were very lopsided to benefit the rich.
yeah yeah the talking point (the rich are ones who create jobs) bla bla bla many jobs have been going to China not here. the tax cuts should have gone to small business since they have been growing and creating many jobs but Big business sure as heck don't want that and I think we all know that Republicans are in Big business pocket.