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Originally Posted by Undertoad
Didn't happen? The growth from 2003-2006 was quite brisk, third quarter 2003 after the cut was phenomenal. Negative growth didn't happen until third quarter 2007.
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We discussed this same thing back then. Cited were the Kennedy tax cuts and the resulting upturn. Who was it who also reminded what happened many years later because of those Kennedy tax cuts? Recession.
Deja vue. Tax cuts only for the rich have contributed to an economic malaise. When the first tax cuts started a recession, they used more tax cuts to mask the inevitable. Welcome to an economy created by Cheney's tax cuts.
Tax cuts are based on the theory that free money can cure all economic ills. But as predicted when we had this same discussion, free government money would make the economy get better (it did not boom - just improved). And now we must pay for all that free money with recession. Those who ignored the history of those Kennedy tax cuts are doomed to repeat it - and still deny it?
Bottom line - the Dow is lower than it was when George Jr entered office because he tried to fix the economy by throwing money at it while stifling innovation. We can expect his 'throw money at problems like a grenade' economics to cause a 36% drop in American incomes after causing the average American income to drop 2% over his past eight years. You would call that a better economy?
Most of the mid 2000s growth was fictitious paper growth and years of deregulation - Enron accounting was alive and well. Ie housing prices increased 40% too high. Assets attached to nothing real. Instant wealth when war consumes capital (that causes massive recessions four and seven years later ie Vietnam). Wealth created by putting more people deeper in the debtor column. Massive wealth converging on the rich. Economic numbers 'looked' better because the average American was spending 140% of his disposable income rather than 80% in order to 'keep up' and because money was so cheap (interest rates). More money spent on consumption rather than productive R&D and innovations. Numbers look good when real economic growth did not exist.
Average American incomes dropping by 2% while "Reagan proves that deficits don't matter" - destroying the Clinton balanced budget to have a drunken party and call that economic growth? Now we pay for his economic policies and tax cuts. Bottom line - growth finishes massively negative compared to world standards. Government throwing money like a grenade created minor economic improvements in those cited early years followed by much larger losses later.
"The only tax cut is one that cuts spending". An economic reality that George Jr has now proven but again.
Unfortunately, in making concessions to Republicans, the so called stimulus plan is now something like 42% tax cuts. That is the equivalent of requiring everyone to replant their lawns every year – another law that can create economic growth according to the numbers UT was citing. Those tax cuts mean the recession will be longer and worse years later into the next decade. Who noted what happened to the economy after those Kennedy tax cuts created a temporary boom? Deja vue. We see the resuting economics turmoil again because of tax cuts and other money games.
Quote:
Originally Posted by Redux
But in case where we are now after the $1.8 trillion in tax cuts?
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Where it was predicted back in early 2000 when the full story of the Kennedy tax cuts were cited. "Only tax cut is one that cuts spending". Otherwise any gains are more than destroyed by the resulting recession. Money can never solve economic problems despite the many who even cited Kennedy tax cuts to justify George Jr's same economic solutions. Unfortunately, the myth continues to be promoted by politicians who work to prolong the inevitable recession.