450 Economists Predicted Bush Tax Cut Debacle back in 2003

Filed in National by on December 6, 2012

The statement signed by roughly 450 economists, including ten of the twenty-four American Nobel Prize laureates alive at the time, was signed and ran as a full page ad in the NYT in February 2003.

“Passing these tax cuts will worsen the long-term budget outlook, adding to the nation’s projected chronic deficits. This fiscal deterioration will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research. Moreover, the proposed tax cuts will generate further inequalities in after-tax income.

To be effective, a stimulus plan should rely on immediate but temporary spending and tax measures to expand demand, and it should also rely on immediate but temporary incentives for investment. Such a stimulus plan would spur growth and jobs in the short term without exacerbating the long-term budget outlook.”

But the Heritage Foundation trotted out a couple of economists who said, “So’s your face.”

Here is the guy who gets everything wrong, Dick Morris, on the topic as late as 2010:

How should Republican candidates handle the tax issue? By arming themselves with one basic fact: tax cuts–not increases–generate additional revenue.

By squelching economic activity & reducing consumer buying power, higher taxes hurt the economy, dry up commerce, and reduce tax revenues. Tax cuts do just the opposite: By adding to buying power, they add revenue. This isn’t just theory. It’s what has happened every time. (snip)

So remember that mantra: Lower taxes produce higher revenue. It’s one of the most powerful messages we have.

Good times..

About the Author ()

Jason330 is a deep cover double agent working for the GOP. Don't tell anybody.

Comments (5)

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  1. Jason330 says:

    I’ll just go ahead and put this reminder here:

    ‘Fiscal Cliff’ Town Hall Forum

    When: Saturday, December 8 from 10:30 AM to 11:30 AM
    Where: Unitarian Universalist Fellowship of Newark (UUFN)420 Willa Road Newark, DE 19711

  2. X Stryker says:

    Conservatism is a disease of judgement, where those whose counsel is proved repeatedly wrong are listened to above all others so long as it affirms that which one wants to believe already.

  3. I guess they were not so accurate. The Federal revenue rebounded after the last recession at the end of the Clinton term and the post 9/11 shocks, within a couple of years inclusive of the tax cuts. http://www.usgovernmentrevenue.com/revenue_chart_1950_2015USp_13s1li0181600_738cs_F0t I don’t think the Bush tax cuts were the best designed, but they did not hurt revenue more than a year or two. The financial crisis had nothing to do with tax cuts or for that matter would a minor increase matter either in econometric terms.

    Income inequity is not a bad thing. People do have equal desires, drives, goals, or passions. Why should their incomes be equal? I don’t want a country based upon income equality. I want one based upon prosperity and liberty. It matters not how rich someone else is. What matters is what is the standard of living for most people? Globalism is presenting a major challenge to our standard of living. We do not need to redistribute wealth. We need to become better at wealth creation.

  4. geezer says:

    As usual, your link does not demonstrate your contentions or analysis. The only spike in revenue was a result not of tax cuts but a crazily inflated housing bubble, the bursting of which undermined a credit system that had extended themselves far beyond the actual value of their assets. The economy still hasn’t recovered, as should be expected in a credit-caused recession.

    I thought you were country boy enough to know you should stay out of unfamiliar fields.

    “Income inequity is not a bad thing.”

    It demonstrably is a bad thing, going back to the ancients. See Plutarch. See the evidence of the past century and a half. Stop preaching twaddle.

  5. Liberal Elite says:

    @RD ““Income inequity is not a bad thing.”

    @g “It demonstrably is a bad thing,”

    It’s one of those things that has an optimal range.

    Currently it’s too high in the US.. and about the same as it is in China.

    When it’s too low, the incentive to excel is missing. If you’re going to earn the same regardless of how hard you work, that’s not a good thing.

    OTOH, there’s a very high correlation between revolutions and income inequality (e.g. French revolution), and misery in general population.

    If I recall correctly, the Gini index under GWBush climbed from about 0.40 to 0.45, and both those numbers are considered by experts to be too high.

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