Were the Bush Tax Cuts Good for Growth? ----- NO(with chart to prove it)!!!

[kpete]

November 18, 2010, 8:45 am
Were the Bush Tax Cuts Good for Growth?
By DAVID LEONHARDT

...............Why should we believe that extending the Bush tax cuts will provide a big lift to growth?

Those tax cuts passed in 2001 amid big promises about what they would do for the economy. What followed? The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7.

The competition for slowest growth is not even close, either. Growth from 2001 to 2007 averaged 2.39 percent a year (and growth from 2001 through the third quarter of 2010 averaged 1.66 percent). The decade with the second-worst showing for growth was 1971 to 1980 — the dreaded 1970s — but it still had 3.21 percent average growth.

The picture does not change if you instead look at five-year periods. Here’s a chart ranking five-year periods over the past 50 years, in descending order of average annual growth:


MUCH MORE:
http://economix.blogs.nytimes.com/2010/11/18/were-the-bush-tax-cuts-good-for-growth/?src=busln

[mod mom]

1. facts-what a silly inconvenience.

[liberal N proud]

2. The GOP support for the bu$h tax cuts is not about growth or facts

It is only to better line the pockets of the wealthiest Americans.

[Solly Mack]

3. Bush was a disaster for the United States. Nothing more.

It would be accurate to call the Bush "administration" a criminal enterprise - because that is what it was....thugs looting the country for their own gain. Calling Bush a bad president is a compliment. He wasn't simply bad...he was dangerous and destructive...he was and is a common thug and a war criminal.

[madokie]

9. You damn right he is

should be in the dock at the hague but then again he should be in one of our own jails awaiting one of many trials.
people are put to death for less than his least offense.

[niceypoo]

4. GOP tax policy is NOT capitalism

It fails by design. Supply side GUARANTEES deficits because there is no corresponding increase of wages to meet supply. On the contrary, wages drop over time. The difference between supply and wages is represented by deficit spending. There is no other possible outcome to supply side.

[Kurt_and_Hunter]

5. This is exactly the same argument as the RW claim the stimulus did nothing

There is no evidence on that chart as to whether the Bush tax cuts were good or bad for growth. Versus what?

[Winterblues]

8. What else was done to account for such a large decrease between 2005-2010

If there was some other factor please explain what it was? What else was different?

[spanone]

6. i'm amazed that i hear this all the time on DU, but never by democrats in the media

[ProfessorGAC]

7. Well, Duh!

(The well duh is not directed at you. But, this has been accepted by the academic econometric community for quite some time. Even at U of C!)

Never in U.S. history has there been any proof of a causative link between tax rates targeted to the higher income population and macroeconomic growth.

We saw a decent effect of the Reagan tax cuts, but that was because the marginal rate cuts were substantial down to a large proporation OF THE MIDDLE CLASS!

Tax custs only help under two circumstances: The cuts involve a raising of the level under which one pays zero in taxes (standard deduction and exemptons) and they target somewhere near 50% of what can be fairly be termed middle class.

Now, not having the sustainable growth to tolerate the cuts, plus increased military spending doomed Reaganomics, as they became the voodoo, GHWB called them.

Quite honestly, the best way for tax rates to be changed for growth in an economic situation like now would be to make the first $30k nontaxable. That would affect nearly everyone from the working poor to middle class folks with 6 figure incomes. What it doesn't affect much are people who have 7 and 8 figure incomes. Now, move the marginal rates up 2% for EVERYONE. Since poor people won't pay the 2% there is no negative effect, and for a 6 figure earner, it would still be a sizeable net tax cut.

But, cutting taxes on the high end is not an economic growth lever, and never will be.
GAC

[patrice]

10. Stand up FOR YOURSELVES! Please grab this chart, all, and share it!

[Kablooie]

11. Supply side economics has been clearly demonstrated to be nonsense.

I'll bet not a one of the Republicans in our government can give an educated explanation of why it is even reputed to work.
It's pure politics and has nothing to do with economics at all.

Supply Side:
Give more money to producers and they will produce more and the economy will grow.
Consumer demand is just a consequence of this.

Traditional:
Give more money to consumers and demand for goods will increase and the economy will grow.
Producers will always find a way to produce more if demand grows.

[niceypoo]

12. Supply side is NOT CAPITALISM

Democrats need to mention this EVERY TIME republicans bring it up. SUPPLY SIDE ECONOMICS IS NOT CAPITALISM AND IS GUARANTEED TO FAIL EVERY TIME.