Harry Truman supposedly said once that he wanted a group of one-armed economists because the ones he currently employed kept saying, "But on the other hand...". My morning blog-run turned up an interesting post on Powerline that was linked to a column by Lawrence Kudlow in the Washington Times concerning the (gasp!) shrinking budget deficit.
Don't expect NPR or Dan Rathernot to do a big story on this any time soon. Why? Because it means that both Ronald Reagan and G.W. Bush were right about tax cuts: if you give people more of their money back they will spend more, that will help generate more tax revenue and the economy will benefit. Shocking. This stuff is pretty much Macroeconomics 101-type stuff so I'm sure it goes unnoticed in the hallowed halls of the socialist elite who run the mainstream media. After all, if the red states can understand it, it must be too base to be useful.
Posted by Matthew at January 17, 2005 09:25 AMROFL
Yeah, WHATEVER Matt !
The very first act after this last election by the republicans was to raise the Federal Debt ceiling to $8.2 Trillion. This is the 3rd time in the past 4 years that the debt ceiling has been raised by Bush. And remember, GWB had a surplus of around $237 Billion when he took office.
Speaking of Macroeconomics 101, lets look at some HARD numers shall we?
Federal Deficits Starting from our beloved Reagan Years.
1981 - 1989 (Reagan)
Deficit rose from $79 Billion to $152.5 Billion
1989 - 1993 (Bush Sr.)
Defict rose from $152.5 Billion to $255 Billion
1993 - 2001 (Clinton)
Deficit FELL from $255 Billion to a SURPLUS of $236 Billion.
2001 - Present (Bush Jr.)
Deficits ROSE from a SURPLUS of $236 Billion to a current deficit of $307 Billion.
So guess what? The ONLY time in the past three decades when the US Govt has NOT had a deficit, was when that "Tax and Spend" liberal Clinton was president (GASP!). A gain of close to $500 Billion. And in 4 years we have gone back not only to a deficit, but the highest recorded one in history.
The federal debt in 1981 was just below $1 Trillion (about 32.5% of GDP). The estimated Federal Debt for 2005 stands at $8.5 Trillion (about 67.5% of GDP). Remember, at 100% of GDP, one is officially BROKE.
Am I glad, deficits are going down? Sure. But let's quit deluding ourselves and the Red States. Domestic spending on "non entitlement" programs is rising at an astounding rate. Try going to your bank tomorrow and telling them with a straight face that you are a over a million dollars in debt, but are saving money in your penny jar.
I await the standard 9/11 excuse.
Conservative, My ASS!
Hash
Posted by: Hash at January 17, 2005 02:56 PMBefore we get all excited, can you tell me where the Clinton surplus came from?
Posted by: Matt at January 17, 2005 07:26 PMLet's see,
Quoting from the article you had linked in your blog, it came from:
"Following the Clinton cap-gains tax cut and savings expansion bill of 1997, investment-related tax collections led to bull-market budget surpluses in the pre-September 11 period of 1997-2001."
It's not like I am some big Clinton Fanboy. The point I am trying to make is that Tax Cuts funded by deficits are meaningless. It's like robbing Peter to pay Paul. We can get all excited about "giving back the people their money" but when the govt. is so deep in debt, they have already spent your money. Returning the people's money only works when you don't borrow more to pay for your pet programs. Otherwise, it is just a sham. You end up paying for it anyway.
It's like my boss giving me a pay raise by borrowing from my own 401K account. Or based on our current fiscal policy, my grandson's 401K.
Hash
Kudlow is not telling the whole story. The fact is, the deficit and individual income tax receipts have just begun to recover from their lows reached in late 2003 and early 2004. The only "roaring" to be heard has been in spending and, to a lesser extent, those receipts whose tax rates have not been cut. See the full analysis of Kudlow's article at the URL attached to this message ( http://home.att.net/~rdavis2/kudlow3.html ).
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