George Bush on how tax cuts have saved us all from economic disaster
Commenter smedley and Swamplander Karen Tumulty have asked me to take a look at President Bush's speech yesterday to the U.S. Hispanic Chamber of Commerce, especially his comments about tax cuts. Here they are:
I remember meeting with some right after the attacks and we were wondering whether or not our economy could withstand a terrorist attack -- after all, a recession was in place just as I came into office, then the terrorists attacked, then we had corporate scandals.
And a lot of folks were wondering whether or not this economy would be resilient enough to withstand those pressures. And it turns out it was. And I want to thank you very much for supporting the tax cuts plans that had good effect on small businesses all across the United States during that period of time. I think when people take a look back at this moment in our economic history, they'll recognize tax cuts work. They have made a difference.
And this is what we're doing again. We've entered another period of difficult times. I am confident in the long term for the United States' economy. I know we're resilient. I know we're entrepreneurial. I know we'll withstand these times. I want to thank you for supporting the economic stimulus package that we passed, which provides strong incentives for small businesses to expand and will put money into the pockets of the people who earned it.
Secretary Paulson has assured me -- he's a "can-do" guy -- that the checks will be coming into the mail in the second week of May. The other thing I do want to assure you of is that if Congress tries to raise taxes, I'm going to veto it. We don't need tax increases. (Applause.)
Now I don't think the Bush tax cuts are the cause of our current economic problems (the misdevelopment of our financial system, which began long before 2001 although it took its wildest form afterward, is the main culprit). But there is something bizaarely disconnected from reality about his account. It's entirely possible Bush will leave office next year having presided over the worst eight-year stretch for the U.S. economy since the Depression (or at least the 1970s). And all he can say is that tax cuts are good?
I do think he's right about Americans being resilient, though. We can bounce back from anything. Even, uh, the Bush era.
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Thank you for responding, Justin. This is similar to the President's interview with the Wall Street Journal a couple of months ago, wherein he was asked about the falling dollar: "Our policy is that we will have a strong dollar." And "the markets will decide" the strength of the dollar. This from our first MBA President.
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Smedley-
That first quote is outstanding, 'cuz I like where Bush is coming from.You see, my policy is that I am a billionaire. So I guess I'll quit my job and buy an island.
Oh, and as to his second quote: now he's letting the market be The Decider. How magnanimous. Maybe one of these days the American people will get to be The Decider . . . but don't bet on it.
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If the economic market was a casino, the Bush economics plan would be a Martingale strategy. The thinking being that if we just hold out long enough and we are allowed to keep upping our credit limit and upping the bets, we'll just *have* to hit that big break were will recoup all the loses. I just don't think the collective US economy can be considered an infinite bank to play with.
It'd be better if we just sat back and counted cards, (if I may be allowed to over-extend the analogy a bit) keeping our bets low until had a reasonable estimate the market's 'odds' had shifted to be more favorable.
You can still lose with either strategy, but guess which one will get you kicked out of a real casino.
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We are still in "full employment" mode as defined by economists so its hard to say that the economy is so bad. If this is as bad as it gets, then we are fortunate.
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This http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?request_action=wh&graph_name=LN_cpsbref1 chart and table, from the Bush administration, shows how negligible the Bush tax-cuts were to job creation. And job creation was the primary reason given for the tax cuts.
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Bush's statement that "tax cuts work. They have made a difference." seems relatively tame compared to some of his past statements. This article quotes Bush as saying that "economic growth fueled by tax relief has helped send our tax revenues soaring" and "You cut taxes and the tax revenues increase". In any case, I recently posted an analysis of the effect of the Bush tax cuts on revenues at http://usbudget.blogspot.com/2008/03/effect-of-bush-tax-cuts-on-revenues.html. Real individual income tax receipts actually declined slightly from 2001 to 2007 and GDP growth has been no faster than usual since 2001. Like Justin, I don't think that the Bush tax cuts are the sole source of this poor growth in revenues. But it is bizarre that Bush should be continuing to tout the economic benefits supposedly wrought by his tax cuts.
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The theory is that low taxes and small government cause the economy to grow faster, right?
So...how's that theory working out?
From 1980 to 2006, twenty-six years during which supply-side economics exerted *huge* sway and did quite a lot of damage to the American system that had done so well by us, how did we compare to those filthy communists in Europe?
Growth in Real GDP per Capita:
US: 67%
EU: 62%Five points. Over twenty six years. Hmmm.
http://trueconservative.typepad.com/trueconservative/2008/02/supply-side-are.html
http://trueconservative.typepad.com/trueconservative/2008/02/small-governmen.html
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