The Terrible Cost of the Bush Tax Cuts.

sabrina 1

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Thu Nov-11-10 09:36 PM
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The Terrible Cost of the Bush Tax Cuts.

Supporters of extending the Bush tax cuts claim they create jobs. This is their main argument for not allowing them to expire. But it is a lie. The Bush Tax Cuts did not create jobs. I don't know why this point is not being made repeatedly since there is so much evidence to support it.

President Bush signs his $1.35 trillion tax cut on June 7, 2001, at the White House.

Supply Side Tax Cuts Failed to Deliver Jobs and Growth Between 2001 and 2007

This and other efforts of the “Bush Legacy Project” to rehabilitate the last administration’s job creation image and defend its tax cuts ignore the stark reality that the Bush administration’s tax policies fostered the weakest jobs and income growth in more than six decades, and ignored alarming labor market trends in minority communities. This record of anemic job creation was accompanied by sluggish business investment and weak gross domestic product growth that characterized the period after the Bush tax cuts of 2001 and 2003 went into effect.

Yet conservatives continue to argue for another round of permanent tax cuts similar to those of the Bush administration. Even if all of the Bush tax cuts are allowed to expire as scheduled, the projected cost of the Bush tax cuts to the federal budget over the next ten years is $3.9 trillion, an average of 1.4 percent of the country’s total economic activity (GDP) per year. Those asking for more permanent tax cuts continue to justify the cost, claiming tax cuts create jobs.

From Christine Romer of the Council of Economic Advisers not looking back, but looking forward:

Extending High Income Tax Cuts is the Wrong Answer for the Economy

First, extending the high-income tax cuts would provide very little job creation in 2011. There is widespread agreement that the short-run economic benefits of high-income tax cuts are small. The Congressional Budget Office lists a tax cut for high-income earners as a particularly ineffective job creation measure. Private sector forecasters have reached the same judgment.1 The vast majority of economic research shows that higher-income earners spend less of a tax cut and so tax cuts to those earners create fewer jobs throughout the economy.

I could post evidence from many sources all night, all saying the same thing. The Bush Tax Cuts did not create jobs, they will not create jobs but they have cost this country trillions.

I posted an OP a while ago, high-lighting a report by David Cay on the Bush Tax Cuts. His report is the most thorough I have seen so far. You can find it here http://journals.democraticunderground.com/sabrina%201/121

He concluded his findings with this statement:

The hard, empirical facts:

The tax cuts did not spur investment. Job growth in the George W. Bush years was one-seventh that of the Clinton years. Nixon and Ford did better than Bush on jobs. Wages fell during the last administration. Average incomes fell. The number of Americans in poverty, as officially measured, hit a 16-year high last year of 43.6 million, though a National Academy of Sciences study says that the real poverty figure is closer to 51 million. Food banks are swamped. Foreclosure signs are everywhere. Americans and their governments are drowning in debt. And at the nexus of tax and healthcare, Republican ideas perpetuate a cruel and immoral system that rations healthcare -- while consuming every sixth dollar in the economy and making businesses, especially small businesses, less efficient and less profitable.

This is economic madness. It is policy divorced from empirical evidence. It is insanity because the policies are illusory and delusional. The evidence is in, and it shows beyond a shadow of a reasonable doubt that the 2001 and 2003 tax cuts failed to achieve the promised goals.

So why in the world is anyone giving any credence to the insistence by Republican leaders that tax cuts, more tax cuts, and deeper tax cuts are the remedy to our economic woes? Why are they not laughingstocks?

THIS is one of the major causes of the Deficit! But the Deficit Commission perpetuates the lie that Social Security, which added ZERO to the Deficit, must be cut by raising the Retirement Age!

End the Bush Tax Cuts! The country cannot afford them. They did NOT and WILL NOT create jobs! They have cost this country trillions and added to the Deficit.

Social Security has cost this country NOTHING and added NOTHING to the Deficit!

What they are proposing is MADNESS, as David Cay says. To extend the Bush Tax Cuts is MADNESS.

Call Republicans in Congress and let them know WE KNOW they are lying.