Tell a Lie Often Enough and It Becomes Truth
Reader comment on: NPR on the Bush Tax Cuts
Submitted by Fred Van Bennekom (United States), Aug 4, 2010 17:31
The July 31 Wall St. Journal had a wonderful graph with its lead story on the Recession Losing Momentum. The charts showed GDP and jobs growth from the start of the last four recessions, two of which were stimulated by tax cuts. The chart shows the current recession to be the gross outlier with economic stagnation compared to rapid growth, including following the comparably severe recession of 1981.
But NPR thinks the economy was a lot stronger in 2001 than it is today so tax cuts then made more sense? How odd. It shows again the lack of understand of the behavioral impact of marginal tax rates on economic behavior. (Obama says he's given lots of tax cuts, but they're all based on belonging to a favored group, not cuts on the margin to promote more wealth generation.)
In June 2001 we were in recession. Three months later we had the economic shock from 9/11. The recession turned out to be so minor NBER considered not calling it a recession at all. Of course NPR thinks the well-timed tax cuts only provided more caviar to the Heinzes. Imagine If President Gore had kept his campaign promise to run surpluses even during a recession!
The last major tax increase was early in Clinton's first term when the economy was a full two years out of recession. If - highlight if -- you're going to raise taxes, the time to do it is during a strong economy.
We're in the midst of the greatest experiment in Keynesian stimulus and the results have not been promising. (Why don't we hear the phrase, "jobless recovery"?) Now let's do the Al Gore experiment and have contractionary tax increases (on marginal tax rates) in a weak economy.
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|Tax Cuts Proven to Raise Deficit [138 words]||Gripper||Aug 5, 2010 07:43|
|⇒ Tell a Lie Often Enough and It Becomes Truth [291 words]||Fred Van Bennekom||Aug 4, 2010 17:31|
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