Were the Bush Tax Cuts Good for Growth?

[ProSense]

Were the Bush Tax Cuts Good for Growth?

By DAVID LEONHARDT

Liz Peek at FoxNews.com congratulates me for writing about the importance of economic growth. So in the spirit of maximizing growth, I want to pose a question: 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:



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Update: A reader asks for statistics on real economic growth (that is, adjusted for inflation). The above chart is already adjusted for inflation.

[OHdem10]

1. Such low growth rates do not provide for job creation in a serious

way. This is why the Obama Adm has created more job
in first 20 months than the whole eight years of Bush
Adm.

[StarsInHerHair]

2. were Reagan's? the answer to both is NO

duh-send this everywhere!