Re: "I'm not talking about tax cuts in general but rather Bush's tax cuts."
Yes, I know.
(But what I was discussing --- from the very beginning of this series of exchanges --- was the TOTALITY of the Bush budgetary actions.... Tax cuts/raises/changes/complications *and* SPENDING.)
That was why I repeatedly made reference to the DETAILED ECONOMIC PROJECTIONS which were run by those three extremely reputable organizations in the run-up to Bush's tax proposals to congress.
TWO of the analysis were required by law:
1) The federal Office of Management and Budget's projection. And,
2) The non-partisan Congressional Budget Office's analysis of the proposals.
The third analysis, (which the White House specially contracted in the private sector for, with a 'Wall Street' econometrics firm, Trend Macrolyrtics... Lufkin's firm, I believe, if memory serves), was mandated to SPECIFICALLY INCLUDE the 'Laffer Curve' assumption that tax cuts ALWAYS produce greater economic growth... (and thus, eventually return *more* tax revenue to Uncle Sam).
Which assumption (the 'Laffer Curve' assumptions) CBO analysis did not encompass.
All three disparate studies returned predicted results with a REMARKABLE degree of commonality between them. (The year Bush made his tax change proposals to Congress, ALL THREE of these studies were written about across all of the national media....)
To summarize the results of all three formal modeling efforts (including the 'Laffer Curver-friendly' model...):
They all said that cutting taxes would
a) (in the near-term) reduce the government's revenue (thus *temporarily* increasing deficits...), but would SPUR HIGHER GROWTH in the mid-term (thus: raising revenue and helping out on the deficit front)...
b) but all three models also projected that UNLESS DEFICIT SPENDING was controlled that (by the "middle of the decade" or so) the negative effects from uncontrolled federal spending running-up the deficits would OVERWHELM the beneficial effects enjoyed from the modestly lowered tax regimen... and then growth going forward (& thus federal revenue) would subsequently be DEPRESSED below what the long-term growth trend would have otherwise been...
To paraphrase yet again:
1) Lower taxes GOOD. (Increase economic performance of the US economy & revenues) but,
2) But continual Federal Deficits BAD. (Lower economic performance level of the American economy & revenues).
Re: "And you have made an argument that they have done more harm than good (if not directly, than because of higher deficits)"
No, once again you are mis-quoting my words.
(I NEVER said that....)
SPENDING is the other side of the federal budget 'coin' from tax policy. (The one you seem to be trying so studiously to ignore. <g>)
When considering the economic effects of government actions, BOTH spending and revenue need to be factored in!
Always.... |
