The power of tax cuts;
Did you know that just over the past 11 quarters, dating back to the June 2003 Bush tax cuts, America has increased the size of its entire economy by 20 percent? In less than three years, the U.S. economic pie has expanded by $2.2 trillion, an output add-on that is roughly the same size as the total Chinese economy, and much larger than the total economic size of nations like India, Mexico, Ireland, and Belgium.
As he points out, you’re probably reading it here first.
More – Ed Morrissey notes some accuse Kudlow of “overplayed a winning hand”. He makes further points worth checking out.
The numbers, adjusted for inflation, are already compelling. The eleven-quarter period that Kudlow highlights ranks well in the last quarter-century. The Clinton administration had a run of such periods, starting in 1998Q1 through 2000Q3 (with each quarter showing this type of growth). Reagan had a similar run, between 1984Q3 and 1986Q3.
As King Banaian pointed out during our radio show, however, the Bush administration’s run has some remarkable differences. First, neither Clinton nor Reagan had a shooting war going on during these periods, allowing for more stable economic environments. Second, oil prices dropped during these periods for Clinton and Reagan, while they have increased considerably during the Bush expansion. Yet the Bush expansion, fuelled by the tax cuts, has shown remarkable stability and consistency. In the past eleven quarters, the only one below an annual rate of growth of 3% was 2005Q4, which reflected the economic impact of Hurricane Katrina. Also, we should recall that the Clinton era coincides with the dot-com bubble and the bulk of the investor frauds of Enron, Global Crossings, and Worldcom.
So what does that have to do with tax cuts? During the Clinton non tax cutting years the US economy did as good or better.
Robert:
Facts and data?
Robert, you are factually incorrect. The economy under Clinton really took off after 1996, that was after a MASSIVE cut in Capital gains tax rates. Yes President Clinton and Secretary Rubin signed into law a Republican massive tax cut for the “Rich”, and the economy soared.
Don’t ever expect the lib/left to understand tax cuts. Their mindset is still take from the wealthy, keep whatever I can, and propose to help the less fortunate. Don’t really do anything as our sheep may become aware of how things work, and then, poof, their goes our vote base.
Here.
http://www.neatideas.com/data/data/GDP.htm
It should also be pointed out that in the past 11 quarters Bush has added about $1.2 trillion to the US debt. It’s pretty easy to get good gdp growth when you’re pumping that kind of dough into the economy.
“What does that have to do with tax cuts?” Robert says.
Everything.
You will also refuse to believe that when taxes are cut, government revenue goes UP, not down, as liberals would dream. It happens all the time. The common sense revolution under Mike Harris cut taxes and revenue broke records and continued to climb, allowing increased spending without deficit (the exact polar opposite to what is happening in Ontario now – decreased spending, lower revenue, higher deficits -everybody loses). The economy of Ontario is now just stagnating under McWimpy, chomping at the bit for explosive growth, waiting and hoping for the next conservative government to cut it loose. Everybody wins, even Robert.
Don’t ever expect the lib/left to understand tax cuts.
Hey, we’re not the ones who believe that when an individual spends a dollar it has some magical effect that doesn’t apply to when the government spends a dollar. Tax cuts do nothing for an economy just like transfering your pocket change from one pocket to the other–which is basically all a tax cut is–does not increase the amount that’s there.
Yes…I can see where Robert is right……a Government spending $2 Billion on a worthless gun registry has EXACTLY the same effect on the economy as $2 Billion worth of tax cuts invested in growing businesses, hiring employees, creating/selling products…….Guffaw, Guffaw.
When people/business spend a dollar, it is usually done with a thought to recieving good value. In other words MONEY FOR SOMETHING THAT WORKS. When gov’ts spend our taxpayers money it is often for something that DOESN”T WORK. A la MIRIBELLE AIRPORT, ADSCAM, PETRO CANADA, UNITED NATIONS, KYOTO,…….
Robert
When an individual spends a dollar, he or she gets to decide how it best benefits him or her without the nanny state “directing” it to some “worthwhile” purpose. It may seem odd to you but if we all act in our own self interest society actually advances economically at a superior rate than if we have centralized planning. Further, in most instances, the individual created the wealth whereas the government simply stole it through taxation effectively destroying wealth. I am not denying that society requires some level of taxaton but there are certain types of taxation that are counter productive to economic growth (capital taxes, income taxes). Economies that keep these types of taxes to a minimum get the advantage of an expanding economy that benefits all of its citizens in the long run. Economies that put in place tax policies that punish the productive get a stagant or shrinking economy. For good examples of this compare Saskatchewan and Alberta or France and Ireland. Try reading Milton Friedman “Free to Choose” or Ayn Rand “The Virtue of Selfishness”. It might provide you with a more realistic perspective.
And where did that $2 billion go, Nemo2? Oh right, it went to businesses that grew because of it and to employees. Spending is spending, rube, regardless of who spends it. All tax cuts do is transfer spending power from the government to individuals and corporations. And no credible economist (one who isn’t either a leftwing or rightwing shill) has ever backed the absurd claim that tax cuts grow the economy.
But hey, go ahead and continue to believe in the magical properties of tax cuts and we’ll continue to laugh at you because of it.
The only one thats getting laughed at is you robert.
In the world of Robert McClelland, the concept of “wealth creation” does not exist. There are only finite resources called “money” and so long as the government is busy taking “money” from people who have lots and “spending” it …. on anybody who will vote for the people who will take money from people who have lots, all is right with the world.
It’s certainly worked everywhere it’s been tried.
It’s why the standard of living in Cuba is the envy of the world. It’s why Saskatchewan is a shining beacon drawing thousands of Albertans to her each and every year.
Robert, why do you keep torturing yourself in a society ruined by capitalism, when Zimbabwe is just crying out for leaders such as yourself?
As always the lie is in the spin. The US economy is expanding on CREDIT, which is a very tenuous expansion to say the least. The US Dollar deflation has pretty much wiped out any gains the individual may have seen though tax cuts. The Government is debt financing worse than a Dem administration and still the partisan bliders remain on the cheer leaders for this dismally inept Bush regime.
There is no way Bush II has a traditional conservative economic recort/impact with his economic policies. Tax cuts amout to nothing compared to the devaluation of the dollar…a dollar devaluated by debt finacing economic expansion and federal projects.
Bush has created a 3 trillion dollar increase in the national debt by financing an expensive foreign policy which spends 40% of debt financed credit in foreign nations under US occupation….that beats the hell out of slick Willie’s global handouts…the Fed has had the printing presses rolling out the currency to satisfy a domestic economy that is expanding on credit and is heavily debt leveraged…..so we see the inflationary effect peel back the US dollar’s value on world markets…devalued dollaer+ zero gains from tax cuts to the consumer.
The last regime that tried expanding real tangable wealth by printing more money saw Germans taking a wheelbarroe full of Deutchmarks to the store for a loaf of bread….What Makes the US Fed think they are immune to printed currency devaluation
Add to all this morass that the size of a credit contraction needed to stabilize the US dollar’s free fall and the US debt leveraged economy will likely be of the size of the same credit/currency contraction of 1929….but in increments….Bush economics have set the US up for a decade long recession by a contracting cycle neccessary to stabilze US currency and debt.
2300 dollars will buy Robert a one way ticket to Harare Zimbabwe.
Robert,
You are talking through your hat! It isn’t that Clinton and Rubin didn’t do good things for the economy. But they were neo-Liberals who cut welfare, cut taxes [after raising them]and engaged in foreign wars. They are also responsible for an awful recession after the market bubble. Without stimulus, like tax cuts, the downturn would have been much more painful [like the early nineties]when W learned his lessons from his father’s failures.
But I don’t know why I bother. Just go to a lib blog where everyone will agree with you,
I guess Milton Friedman’s Nobel prize was given to him because he was not credible. http://www.hoover.org/bios/friedman/
Your assertions are not backed up with any facts. Your understanding of basic economics is not even rudimentary.
http://www.econlib.org/LIBRARY/Columns/y2003/Wesburytaxcuts.html
“And where did that $2 billion go, Nemo2? Oh right, it went to businesses that grew because of it and to employees”
Hey Robert,the gun registry employs 200 people.Not a great return on the 2 billion.And we don’t know if the 2 billion went to businesses because even the auditor general couldn’t trace it because if the Librano$ scams.
As for tax cuts,if people have more money they spend more,its that simple.Even a lefty like you should have no problem understanding that.When people spend more,they do so on more goods and services,which in turn bumps up manufacturing and businesses offering services,i.e. home improvements,which again multiplies because the ones providing the service in turn buy the goods to do the renovations.
All this has a cumulative effect,the governments haul in more money in higher personal and goods taxes.This money is then available for things like health care and infrastructure.
What its not meant for are scams like the sponsorship scandal,gun registry,etc,which were nothing more than kickbacks to friends and the Liberal party.
Its time to get over the fact the Liberals lost the election,and the people of Canada now have a leader and party the makes good decisions for the people of Canada,not decisions that are in the best interest of their party.
the only way Clinton would have helped the American economy is if he had paid Monica for her heads-up services.
And here is a beauty from the NYT, of all places:
Surprising Jump in Tax Revenues Curbs U.S. Deficit
By EDMUND L. ANDREWS
WASHINGTON, July 8 — An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief.
Robert, if it news in the NYT it must be true! Right?
BTW: Taking advise on the economy from paid off investment cheer leadeers like Kudlow is not a very safe practice if you want to keep a stable investment portfolio….We need to be reminded that Kudlow took $50,000 from Enron to sing irts praises to potential investers and he was one of the few share holders that dumped Enron stock before the implosion….strangely he never advised against ENRON stock until Lay’s shenanegans were common MSM knowledge.
If Ludlow says Bush has managed the economy well…best get your assets in gold.
Warning.
My Blahg » LEADERSHIP ENVY
“**** The Jews” – Robert Mclelland. Should we give people that kind of freedom? … P. Why dont you run up and down the street yelling **** the jews? …
myblahg
Here’s a nice little chart showing the growth of the US economy since Independence.
http://www.csua.berkeley.edu/~darin/images/lnGdp.png
As you can see it’s pretty much been a steady rate of growth regardless of whether or not taxes have been raised, lowered or kept the same. Game, set and match, rubes.
In the world of Robert McClelland, the concept of “wealth creation” does not exist.
That’s it, Kate. Move the goalposts when it’s proven how ignorant you are.
People like Robert and most other socialists are stuck in the Marxist/Malthusian economic mindset of the early to mid nineteenth century. They see economics as a zero-sum game and concepts like added value (beyond labour input) are foreign to them. Command economics is alive and well in their minds — just don’t ask them to actually live under it. And by the way, why do socialist nations need barriers to keep people in, while the capitalist nations need barriers to keep people out? Just curious.
Robert: So in your perfect world the government should keep increasing taxes until they take 100%! That way, the simpletons will be wholly dependant on the state to provide food, shelter, entertainment, etc. Just like Cuba and North Korea, those bastions of economic prosperity!
Get over yourself. Communism failed a long time ago.
sigh…..
aaaaand what did the bushists DO with all the cash flowing hither and thither? you know, the taxes they earn on the now vibrant economy?
er, jacked the total debt to a record high.
squandered it on the war in iraq to the tune of some 10 billion a day. (sure could buy a lot of gas powered generators for THAT kind of pocket change sose the avg iraq would have SOME source of electricity till the power grid is fully operational…) etc etc
spin spin spin oooo, Im getting dizzy with all this republicanist spin spin spin.
p.s. dubya aint got the smarts to figure this out. he’s a frat boy whut got lucky. a clucking parrot reciting his script handed to him by his ‘advisors’.
oh, and mr mclelland, do you have any study or experience in economics?
‘spending is spending no matter where’ etc
not so !!!
the hard reality is there are 2 sides to spending. the spender and the spendee.
it doesnt particularly matter who the spender is. foreign investment, pension funds, consumers, etc. the key is what the spendee then does with it.
in the case of the gun registry ….. we will never know. my suspicion and grounds for protesting and opposing the registry I still view it as a conduit for tax dollars into the pockets of lieberal supporters masquerading as service providers propping up the registry. a bit of it then goes to paying their staff etc. lots of it goes in their OWN pockets for vacations, lavish lifestyle etc, all the perks. and still more goes back into the coffers of the lieberal party in the form of campaign contributions.
BUT, if the spendee is some retail operation dealing with ruthless competition, most of the dollars go into buying new stock, paying sales people etc etc.
so, it matters a great deal WHERE the spending is directed. your kind of logic is the same that supports farm subsidies for tobacco production. ‘good for the local economy’ bla bla bla. ya, and its also good for the companies that provide services to the hospitals where the cancer patients go and funeral home employees etc etc.
take some economics theory before you post any more leftist liberalist nonsense.
my two cents :
http://www.karenselick.com/CL0102.html
ahhh communism . . . we pretend to work, the government pretends to pay us.
Oh I so long for the line-ups for a loaf of bread and my annual shoe allotment as determined by Central Planning. . . nothing like the good old days.
I promised myself that I would not feed the troll today so I won’t.
Hey Robert J. letters, some good points. There is hope for you yet 😉
Spend a 16 hour day cooking up a useless database system on your Mac.
Sell it to an Allan Rock insider for say 20-30 million.
Sit back and watch it crash.
Hire friends and relatives to get it back up and running.
Repeat on a cost plus basis until you can no longer keep a straight face.
Leave for an island tax haven so that none of your dollars get spent on rounds 2 and 3.
Kate:
Here are some widely accepted US GDP growth rates from the US gov for 03, 04, 05 and the first quarter of 06 (we’ll give the US the benefit of a full 13 quarters for this one):
2.7% 4.2% 3.5% and for 06 (F01) 5.6%.
Compounding these year over year gives you a total US GDP increase of 12.3% for the those full 3 1/4 years. Respectable, but nowhere near 20%.
The world bank just released its figures for the total US GDP, and came up with a current figure of 12.46 trillion (USD), which, if you use the above figure of 12.3% growth gives you a starting point of 11.09 trillion USD at the beginning of 2003.
The difference is a much smaller 1.36 trillion dollar increase.
Not to throw cold water on the liberal media hatefest (i’m no fan of it either) but these are widely available figures. Why? Because this information is vital to world markets and investors. There’s hardly a conspiracy against the US or anyone else here.
sources:
http://inhome.rediff.com/money/2006/jul/08india.htm
http://www.cia.gov/cia/publications/factbook/geos/us.html#Econ
http://www.bea.gov/bea/newsrel/gdpnewsrelease.htm
Something that may of interest to anyone commenting here, is that new studies show there a strong correlation between corporate tax rates (in the US they are amongst the highest) and relative wage raises. That is, a 1.0% reduction in corporate taxes leads to about a 0.8% wage increase. Oh and it works vice versa.
Case in point: the Celtic Tiger, Ireland…currently @ 12% corporate tax rate and experiencing exploding wage rates/wealth.
Good times.
Red Dodge,
I can’t remember where I saw this, but recently there was some mention of $250 million in IT costs for the gun registry.
I’ve asked before, and I’ll ask again: can anyone in the private sector remember being involved in an IT project that cost that much? That cost $25 mil?
You’re right – a semi-decent developer with Oracle or DB2 could put together a gun registry db for peanuts and then sell it to Liberal morons for millions.
Exactly Matt.
Consider that we can track every bull/cow/calf in this country without a fraction of a 2 billion dollars budget.
The whole mess is the biggest theft in history.
Go ahead Robert.Tell us again how its good for the economy.
Hmmmm…the first thing the Campbell government did after taking over from the NDP was institute a massive tax cut. BC’s economomy is now smoking hot, a big change from the dreadful economic situation we had under the NDP.
Ahhh…it’s probably just a coincidence, right Robert?
Yes, and coincidentally, increased revenues in Saskatchewan took off only after Calvert finally threw in the towel and lowered oil and gas royalties to allow Big Oil to rape the province of its respources.
This is not good news. Oughta be a law against this. Ver bad news from Noojerkslimes. …-
Surprising Jump in Tax Revenues Curbs U.S. Deficit [Democrats sadden…….]
New York Times
Surprising Jump in Tax Revenues Curbs U.S. Deficit By EDMUND L. ANDREWS WASHINGTON, July 8 — An unexpectedly steep rise in tax revenues from corporations and the wealthy is driving down the budget deficit this year, even though spending has climbed sharply because of the war in Iraq and the cost of hurricane relief. On Tuesday, White House officials are expected to announce that the tax receipts will be about $250 billion above last year’s levels and that the deficit will be about $100 billion less than what they projected six months ago. The rising tide in tax payments has…
http://www.freerepublic.com/focus/f-news/1662409/posts
If the private sector were doing a project like the long-gun registry, for itself, it would have cost a few million dollars. There’s a full analysis here: tinyurl.com/k3dvm
Cutting taxes is not like transferring money from one pocket to the other. It’s like not transferring money from the taxpayers’ pockets to the statists’ incinerator (cleverly disguised as a pig trough).
Robert, not a hypo, but a concrete comparison:
North Korea (state directed economy): no real middle class, nearly the entire country is poverty striken
U.S.A. (free market economy), massive middle class, with relatively small poor population, and by “poor” that doesn’t mean masses of people starving in the streets, like in N. Korea, it means T.V. with basic cable instead of the full satellite package, a small subsidized apartment and not a house, state run hospitals instead of a private clinic ect.
Sorry Robert, but your socialist utopia, is the proverbial road to hell paved with good intentions.
And just think about it Harper is over there right now learning all of Bush’s secrets.
Oh the horror, how will we ever manage to deal with the curse of greater wealth?
As US President Regan once said: “How do you tell a Communist? Well, it’s someone who reads Marx and Lenin. And how do you tell an anti-Communist? It’s someone who understands Marx and Lenin.”
Paying taxes to the government is kind of like paying for maintenance on your car… just think of the money you can save by not paying for that pesky, useless maintenance: no more car washes-that’s what the rain is for; no more oil changes-as long as that slippery stuff is still in your engine it should work just fine; tires should be ok as long they hold air; brakes don’t need any work until the car doesn’t stop anymore; etc. No doubt your car would be just as good as the one that had all that useless maintenance done to it, eh?
lberia, I might need maintenance to keep my car running in fine shape but if the maintainer charges me to empty my ashtray (and I don’t smoke!) or polish the whitewalls or even wash the car, then that sir is being too liberal(with MY money).You gotta give the car owner some responsibility for their wheels.
BTW, I’d also be pissed to have to pay for part of your car maintenance because you don’t make as much as I do.
Your analogy dude.
lberia, I might need maintenance to keep my car running in fine shape but if the maintainer charges me to empty my ashtray (and I don’t smoke!) or polish the whitewalls or even wash the car, then that sir is being too liberal(with MY money).You gotta give the car owner some responsibility for their wheels.
BTW, I’d also be pissed to have to pay for part of your car maintenance because you don’t make as much as I do.
Your analogy dude.
Appologies for double posting… fat fingers.
Dont confuse paying taxes with buying a billion dollars worth of sand at $900.00 a gram.
Or if you prefer, bend over and allow me to do the maintenance on your car for a year.
“Paying taxes to the government is kind of like paying for maintenance on your car”
lberia, if your car costs 50% of your income to maintain, you might want to look at getting a better car, or if you’re driving a Ferrari, a better income.
The last regime that tried expanding real tangable wealth by printing more money saw Germans taking a wheelbarroe full of Deutchmarks to the store for a loaf of bread
And yet, the inflation rate in the USA remains low, how do you explain that genius? BTW you misspelled
tangible, and wheelbarrow. Is that what passes for education nowadays?
I suppose I should have expected my analogy to be taken out of context. I wasn’t referring to emptying ashtrays or tuning a Ferrari, but necessary maintenance. It’s just that some people have different ideas as to what is necessary and what isn’t. This holds true for auto maintenance as well as for tax cuts. Sometimes car owners think that they’re smarter than the engineers and try to save money by avoiding the “unnecessary” stuff, saving money in the short term but paying for it in the long term.
lberia, you miss the point. Taxes were cut yet revenues have gone way up. This would be like getting your oil changes done at Mr Lube instead of the dealership: you have the same maintenance but there is an extra 30 bucks in YOUR pocket.
We can engineer cars, Iberia, but we can’t “engineer” society. I agree that “some people have different ideas as to what is necessary and what isn’t”, and that’s why, in a pluralistic society, the state should exercise the maximum possible restraint in pre-deciding for people what is necessary and what isn’t.
By the way; what’s the one thing a Jaguar can’t pass on the highway? A service station! (And I like Jaguars, at least aesthetically 😉