[detbuch]

Originally Posted by zimmy

Jim, pointing out that revenue went up for a limited time before plummeting doesn't mean you "proved" that tax cuts raise revenue. I don't think you need me to explain why,

"The new CBO data show that changes in law enacted since January 2001 increased the deficit by $539 billion in 2005. In the absence of such legislation, the nation would have a surplus this year. Tax cuts account for almost half — 48 percent — of this $539 billion in increased costs." How about the Committee for a Responsible Federal Budget? Their budget calculator shows that the tax cuts will cost $3.28 trillion between 2011 and 2018. How about George W. Bush's CEA chair, Greg Mankiw, who used the term "charlatans and cranks" for people who believed that "broad-based income tax cuts would have such large supply-side effects that the tax cuts would raise tax revenue." He continued: "I did not find such a claim credible, based on the available evidence. I never have, and I still don't."

From David Stockman
David Stockman, who led the all-important Office of Management and Budget under Reagan and was a chief architect of his fiscal policy, criticized today’s GOP for misreading Reagan’s legacy by adopting a “theology” of tax cuts. Stockman has spoken out before, but took perhaps his strongest stance yet against his own party today, saying “I’ll never forgive the Bush administration” for “destroying the last vestige of fiscal responsibility that we had in the Republican Party.” He also broke with Republican orthodoxy on a number of key issues:

– We need “a higher tax burden on the upper income.”

– “After 1985, the Republican Party adopted the idea that tax cuts can solve the whole problem, and that therefore in the future, deficits didn’t matter and tax cuts would be the solution of first, second, and third resort.”

– The 2001 Bush tax cut “was totally not needed.”

– On claims that Reagan proved tax cuts lead to higher government revenues: “Reagan proved nothing of the kind and yet that became the mantra and it just led the Republican Party away from its traditional sound money, fiscal restraint.”

– Former Vice President Cheney “should have known better” than claim the Bush tax cuts would pay for themselves.

– “I’ll never forgive the Bush administration and Paulson for basically destroying the last vestige of fiscal responsibility that we had in the Republican Party. After that, I don’t know how we ever make the tough choices.”
Bush's economic crew said these things:

Bush administration officials acknowledged cutting taxes decreases net revenue.

"Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves--and were never intended to. Harvard professor Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues."

Read more: Tax Cuts Don't Boost Revenues - TIME


Paulson: "I don't believe that tax cuts pay for themselves." During his June 2006 confirmation hearing, then-Treasury Secretary Hank Paulson said, "As a general rule, I don't believe that tax cuts pay for themselves." The financial information website MarketWatch reported this statement as "echoing the opinion of most economists."

Nussle: Tax cuts do not "totally pay for themselves." According to a November 15, 2007, Washington Post editorial, Jim Nussle, then the director of the Office of Management and Budget, told reporters, "Some say that [the tax cut] was a total loss. Some say they totally pay for themselves. It's neither extreme."

Viard: "No dispute" revenues lower than they would have been without Bush tax cuts. In an October 17, 2006, article, the Post quoted Alan D. Viard, a former Council of Economic Advisers senior economist under Bush, saying that "[f]ederal revenue is lower today than it would have been without the [Bush] tax cuts. There's really no dispute among economists about that."

Lazear: "[W]e do not think tax cuts pay for themselves." During his testimony to the Senate Budget Committee in 2006, Edward Lazear, then-chairman of Bush's Council of Economic Advisers, stated: "Will the tax cuts pay for themselves? As a general rule, we do not think tax cuts pay for themselves. Certainly, the data presented above do not support this claim."

Samwick: "You know that tax cuts have not fueled record revenues." In a January 2007 New Year's Plea," to "anyone in the [Bush] Administration who may read this blog," Andrew Samwick, an economics professor at Dartmouth College and former chief economist to the Council of Economic Advisers during the Bush administration, wrote:

You are smart people. You know that the tax cuts have not fueled record revenues. You know what it takes to establish causality. You know that the first order effect of cutting taxes is to lower tax revenues. We all agree that the ultimate reduction in tax revenues can be less than this first order effect, because lower tax rates encourage greater economic activity and thus expand the tax base. No thoughtful person believes that this possible offset more than compensated for the first effect for these tax cuts. Not a single one.

The "problem" that these quotes talk about is the Federal budget (deficit and debt) and Federal revenues, not the private sector economy and private sector profits. Whether tax cuts bring in more revenue or pay for themselves may be debatable. There are certainly a host of quotes than can be given to support that. There is the Laffer curve theory that supports a level of taxation as being optimal and above which taxation is counterproductive. Those who view the "economy" as dynamic favor that view. Those who view the economy in a more static fashion think it is obvious that the higher the tax, the higher the federal income. When we speak of the "economy," however, most, I think, are referring to the private sector. That the Government has amassed a huge debt and is unable to balance a budget is a different matter. Your list of quotes don't address the "economy" that most of us think of and which has to pay for the "problem."

The first quote is very telling . . . "in the absence of such legislation, the NATION would have a surplus this year . . . tax cuts account for allmost half . . . of this $539 billion in increased costs." The nation he speaks of is the Federal Government, not the States, the businesses, and the individuals who pay for this overarching Government. And, to me, a cost is outlay, purchase, spending, not income. Not being an economist or accountant, I am not aware of this definition of a cost being income. Government economists seem to think it is. In my simplistic view, government costs are government programs--things that cost money, not the money that is used to pay for those costs. If the money, the revenue, is a cost, then logic would dictate that to reduce that cost (tax revenue), you would reduce the tax. And it is a bit laughable to trot out quotes by the very government apparatichiks who helped to spend the Federal Government into its debt as if they know the answer to getting out of that debt.

I'm not sure--are you implying with these quotes and your previous comments in this thread that balancing the Federal Budget and Paying down the debt will create a booming economy, one that will not "implode." And that raising taxes is the way to do it?--"Maybe there is something to the Reagan post-tax cut recession and Bushs II post -tax cut recession."

And that the resulting fiscally responsible Government will then give the private economy the "confidence" to flourish?--"Balanced budgets help confidence in the economy . . ."--whose confidence and which economy?

As Milton Friedman once asked--where are these angels (that would govern so responsibly)?

So, then, if the Government had not been so profligate in the first place--as it has been for the past century--the "economy" would never have imploded?

Perhaps such thinking is backwards. The "economy" is not driven by the Government. The Government is fed by the "economy" as you almost correctly stated--"When the economy grows, the budget deficit decreases." Except it hasn't worked that way because angels were not at the Government helm, and they sqaundered the wealth given to them (more accurately--that they confiscated), and to think that taxing the rich, raising taxes, blah, blah, will contribute to a balanced budget and a paid National debt is a fiction devoutly to be wished. There is nothing short of a balanced budget amendment that will stop the devils from spending any increased "revenue," as the Federal Government has always done since it wrested powers from State and local governments and from individuals to spend in the manner it does. The chance of such an amendment passing is . . .? Or of returning powers to the States is . . . ? Only the Tea Partiers have the passion for it, and they are being demonized and ridiculed.