Saturday, August 20, 2011

Origins of our Debt Nightmare II: The Bush Tax Cuts

I have no doubt that the Bush Administration will prove to be the most economically backward time in our history--a time when deregulation ran amok, the US debt binge reached a crescendo, surpluses transmogrified into massive deficits, the nation's credit cards paid for unnecessary wars, and economic inequality surged. The Bush economy yielded a few big winners and left the vast majority of Americans with stagnating or declining economic prospects.

Central to the dementia were the Bush Tax Cuts. Basically, the Bush credo, still followed by extremists today is that we should abolish taxes. They would rather default on our debt than raise taxes. Bush never saw a tax cut he could oppose. Their simplistic propaganda basically evinces a total repudiation of the Oliver Wendall Holmes dictum that "Taxes are the price we pay for a civilized society." Even life-long Republicans now recognize that "the Bush tax cuts were responsible for increasing the debt by $3.2 trillion — 27 percent of the fiscal deterioration since 2001." This recklessness continues today in pursuit of the economically incoherent concept that cutting taxes always increases revenues. This is nonsense.

Thus George W. Bush presided over the most dramatic fiscal reversal (massive surplus to massive deficit) in the history of the US:

The bottom line is that the most powerful economic elites pay less in taxes than anytime since World War II, as illustrated here:


Their efforts to continue this enormous giveaway marks this generation of economic elites historically irresponsible. Warren Buffet correctly assesses the dementia here.

2 comments:

  1. wonderful quote from the williamson article:

    "Tax cuts give Republicans an opportunity to distribute economic benefits through the tax code the way Democrats distribute them through appropriations, and the exaggeration of the supply-side effect gives them an opportunity to pretend like those benefits are cost-free."

    true.

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  2. Jessica Bradley (Memphis Law)November 11, 2011 at 7:08 PM

    Our tax professor told us that no taxes are efficient taxes. There will be inequality somewhere, no matter which approach is chosen. While appropriations undoubtedly have a negative effect on a specific portion of society, the result of Republican tax cuts is that the negative effects of losses in government funding are felt by lower income tax payers. Cuts at the top of the tax base benefit those who are in a position to carry the tax burden. Even if the cuts are offered equally to the poor, the cuts will have an adverse effect on those who rely on government services the most for their day-to-day existence. Taxes are an unenjoyable, but wholly necessary reality of a civilized and equitable society. A policy that supports tax cuts at the top places an undue burden on those that can afford it the least.

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