Lessons from The Laffer Curve in the 1920s
"Democrats have been having a field day with the cry of "tax cuts for the rich" — for which Republicans seem to have no reply. This is especially surprising, because Democrats made the same arguments back in the 1920s, and the Republicans then not only had a reply, but one that eventually carried the day, when the top tax rate was brought down from 73 percent to 24 percent (see chart above).
Those who argue that "the rich" should pay a higher tax rate, and that the revenue this would bring in could be used to reduce the deficit, assume that higher tax rates equal higher tax revenues. But they do not.
After Secretary of the Treasury Andrew Mellon finally succeeded in getting Congress to lower the top tax rate from 73 percent to 24 percent, the government actually received more tax revenues at the lower rate than it had at the higher rate. Moreover, it received a higher proportion of all income taxes from the top income earners than before.
Something similar happened in later years, after tax rates were cut under Presidents Kennedy, Reagan and G.W. Bush. The record is clear. Barack Obama admitted during the 2008 election campaign that he understood that raising tax rates does not necessarily mean raising tax revenues.
Why then is he pushing so hard for higher tax rates on "the rich" this election year? Because class warfare politics can increase votes for his reelection, even if it raises no more tax revenues for the government."
MP: Part of the confusion about the relationship between tax rates and tax revenues comes about because we use the terms "raise taxes" to mean both "raise tax rates" and "raise tax revenues" interchangeably (e.g. "raise taxes on the rich"). In reality, "raising tax rates" could result in either "raising tax revenues" or "lowering tax revenues." Most of the discussion about "raising (or lowering) taxes" leaves out the most critical factor: the "tax base, i.e. the activity subject to be taxed," and its changes in the tax base that ultimately determine the relationship between "tax rates" and "tax revenues."
In the case of lowering the top marginal income tax rate from 73% to 24% in the 1920s, the "tax base" expanded so much in response to the lower tax rate that tax revenues actually increased, not decreased. In other words, history tells us that the way to impose a "tax hike on the rich" is to lower, not raise, the tax rate. Lower tax rates increase the incentives to engage in productive, taxable activities and increase the incentives to report instead of hide or shift, taxable income, and therefore raise tax revenues.
With marginal tax rates scheduled to increase next year, the lessons of history also tell us that the tax revenues collected next year will go down, not up. Reason? The tax base of activity subject to the higher tax rates will contract so much that the tax revenue collected will shrink, not expand. Next year's "tax hikes on the rich" will likely end up being a "tax cut" in revenues, and will make the budget deficit worse.
89 Comments:
The Laffer curve effect can never be pointed out too many times.
Possibly more importantly, and this post almost gets there, is that there is an instantaneous Laffer curve and a cumulative Laffer curve. If tax rates are raised this instant, the resulting change in tax revenue today (or in the next 12 months) is one data point.
But how about decades hence? Today, there's more of a captive audience with financial obligations, lifestyle expectations, education investments, etc. The next generations don't yet have those commitments and can and will significantly alter their life paths based on expected tax rates. Any sort of longer term investment is similarly affected.
Wait, do you have any evidence for your casual claim that a similar thing happened under Reagan and Bush? I've seen plenty of evidence from various economists that this simply isn't true.
But perhaps the most damning comment comes from Greg Mankiw himself (Bush's economic advisor!):
"I used the phrase "charlatans and cranks" in the first edition of my principles textbook to describe some of the economic advisers to Ronald Reagan, who told him that broad-based income tax cuts would have such large supply-side effects that the tax cuts would raise tax revenue. I did not find such a claim credible, based on the available evidence. I never have, and I still don't."
So, are you a charlatan or a crank?
Further evidence against your fairy story that the Reagan and Bush tax cuts boosted revenue.
sesh nadathur,
None of the "evidence" you cited refutes anything that supply siders argue happened. Not a single bit of it.
Mankiw and Keynes and almost all other economists who Keynesian bias trot out the dubious argument that revenue as a share of GDP declined. Well, duh! That's exactly what is supposed to happen with marginal tax rate cuts. Marginal tax rate cuts have so much increased GDP growth that total tax revenues increase even while the government's share of production declines.
There is not plenty of evidence that the Kennedy, Reagan, and Bush II marginal tax rates decreased tax revenues. Just the opposite happened once the marginal tax rates were actually reduced.
Note: although GDP growth started each time after the tax cut legislation was passed, it only exploded after tax rate cuts went into effect.
"even while the government's share of production declines."
should have been:
"even while the government's share of fruits of production declines."
the evidence is also clear on this chart that details how we went from a Clinton Surplus to a 1.5 trillion deficit.
http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png
The Bush tax cuts were approved but no cut in spending accompanied it so we went immediately from a balanced budget to a 400 billion deficit.
Then the 2008/2009 recession hit and the bottom dropped out of tax revenues and they dropped to the lowest point in 50 years ...adding to the deficit further.
So during Bush's term, we cut taxes and increased spending on DOD and Homeland Security - and instead of increased revenues - we got decreased revenues and in 2008 CBO was projecting a 1.5 trillion deficit before Obama even took office.
Austerity - shows what happens if you cut taxes and the result is decreased revenues not increased revenues.
the "theory" that the economy will always grow if taxes are reduced is not born out in reality.
We cut taxes during Bush's term and we never reduced spending .... we increased it.
Doesn't this story of Eduardo Saverin demonstrate the very real effects of the Laffer Curve? If people perceive taxes to be too high or unfair, they can and will find ways to shield their income from taxes (in this case, renounce citizenship).
It is always surprising to me see the trolls that come out on this blog. This has been the most interesting blog I have found, naturally Mark Perry has wonderful insights and the comments usually expand on the article. Then the trolls come in with their talking points straight from the DNC. They may not think they are from the DNC but they are. It is a shame.
Federal income tax revenue as a percentage of GDP was equal to or higher under the tax rates of Reagan, Bush, and Clinton than they were under the much higher tax rates of the period from 1951-1981.
http://online.wsj.com/article/SB10001424052702304259304576375951025762400.html?mod=WSJ_Opinion_LEADTop
" Federal income tax revenue as a percentage of GDP was equal to or higher under the tax rates of Reagan, Bush,"
but when you cut taxes and not spending and revenues do not increase - you get a deficit like we now have.
that's not theory. that's the reality.
re: " Why 70% Tax Rates Won't Work"
from the WSJ OPINION page and no one is talking about 70% tax rates, they're talking about tax rates that were in effect under Reagan/Clinton.
the article stopped the GDP percent at 2002, why? Is it because the claim does not work for 2002-2011?
what the tax-cutters did was they abandoned PayGo using the wars as an excuse (like deficits did not matter).
If you want to cut taxes, then you need to pair that with equivalent spending cuts and what they did under Bush was not only not cut spending...they INCREASED it - they DOUBLED the DOD budget!
As soon as they cut taxes without cutting spending, they had an automatic deficit then it increased as DOD spending increased.
Then the next couple of years - tax revenues did not increase anywhere near enough to wipe out the deficit, then in a couple more years, recession hit and the deficit doubled .... and that deficit ... remains....
so we have folks who fervently believe in theory but when presented with the realities - they cling to their theories and blame reality.
Even now.. there are no cuts-only budgets that actually do balance the budget save for Ron Pauls which slashes DOD (as it would have to).
Paul Ryans is totally bizarre. He cuts Medicare/MedicAid but not DOD and claims supply-side will increase revenues and the budget will balance in 2037.
By that time - the debt will be 30 trillion.
the problem here is we have the theorists running amok and none of them wants to deal with the reality.
"but when you cut taxes and not spending and revenues do not increase - you get a deficit like we now have."
Larry, the point was lower marginal tax rates may very well increase tax revenue. It said nothing about spending. Do you have any evidence that lower marginal rates lead to decreased revenue? Didn't think so.
"what the tax-cutters did was they abandoned PayGo using the wars as an excuse (like deficits did not matter).
If you want to cut taxes, then you need to pair that with equivalent spending cuts and what they did under Bush was not only not cut spending...they INCREASED it - they DOUBLED the DOD budget!
Again, you missed the point. Lower rates saw increased revenue not decreased. Spending is an entirely different topic.
Mark Cancellieri: "Federal income tax revenue as a percentage of GDP was equal to or higher under the tax rates of Reagan, Bush, and Clinton than they were under the much higher tax rates of the period from 1951-1981."
Although this is insightful, I think it misses the point about supply side taxes. The goal is not to maintain a ratio of income taxes to GDP. That's sort of irrelevant.
The goal of supply side tax rate cuts is to grow the economy. As it turns out, in growing the economy, marginal tax rate cuts have historically increased total tax revenues. Not the ratio of taxes to GDP, but the absolute level of revenues.
It's important to note that increasing tax revenues was not the goal of almost all of the supply side economists. The goal was to grow the economy. The side benefit of increasing total tax revenues was a side benefit used to sell the tax cuts to the power brokers in Washington.
IMO, our nation would be far, far better off if we cut marginal tax rates so much that total tax revenues actually did decrease. But only if we could force Congress to cut spending to that lower level of tax revenues.
further proof of mark's thesis:
(this is an excerpt from our feb investor letter. don't let the capital letters fool you. it was written by me)
The narrative we often hear is that Clinton's increase of the marginal rate for top earners drove increased tax revenues and nearly closed the budget deficit and that this tried and true idea is just what we need now. The facts, however, tell another story. The tax hike was in 1993. Income tax revenue as a percentage of GDP was 7.7%, in 1993, essentially identical to the 7.6% the year before and lower than any year in the 80's. In 1994, it was 7.8%, tied with 1984 for the lowest year in the 80's, and 1995 was 8% tied with 1988 for the second lowest year in the 80's. Thus, we see that the tax hike had little if any effect on revenues and levels were stubbornly at very low absolute levels. What is being left out of this revisionist Clinton history is that in 1997, a major tax cut was pushed through. Capital gains fell from 28% to 20%. This drove a large jump in tax revenues. 1997 saw 9% income tax as % of GDP, 9.6% in 1998 and a peak of 10.2% in 2000. And this is only half the story as increase in overall revenues is not just a function of the % of GDP but the growth of GDP as well. Revenues grew 33% from 1992-6, and 39% from 1996-00, a 20% increase in growth rate. If we truncate the Clinton administration into 2 parts, pre 1997 tax cut and post, we see a very clear distinction. Post the cut, business investment skyrocketed and the economy grew at a 4.4% annualized rate, 33% faster than the period before the tax cut and real wages grew 1.7% a year reversing their decline in the pre tax cut portion of Clinton's administration. This same trend is clear in Reagan's cap gains tax cut. In light of this data, we think the case is quite convincing that the current proposed hike in the top tax rates will produce nothing but economic friction and that a hike in cap gains (from 15% to 23.8%, a 59% rise) will probably reduce revenues and will certainly harm investment and growth. DC appears to have mistaken the brake for the gas in their tax policy. This set of proposed changes look to be extremely harmful economically and unlikely to generate additional revenue. We have long passed the point where it could. The tax base needs to be broadened, not further focused. In the 80's, 12% of Americans paid no net federal income tax. That number is now about 50%. That is the source of the recent revenue decline, but paying taxes again is a tough sell to voters who are enjoying a free ride. This populist instinct is likely the greatest threat to recovery past 2012. As Pogo said "We have met the enemy and he is us."
Here's some statistics on the top marginal tax rates and the total income tax revenues during the Reagan and Bush I years:
Year .. Top rate .. Revenues (Bns)
1981 .... 69 ..... 284
1982 .... 50 ..... 278
1983 .... 50 ..... 274
1984 .... 50 ..... 302
1985 .... 50 ..... 326
1986 .... 50 ..... 367
1987 .... 39 ..... 369
1988 .... 28 ..... 413
1989 .... 28 ..... 433
1990 .... 28 ..... 447
1991 .... 31 ..... 448
1992 .... 31 ..... 476
Sources: National Taxpayers Union and Bureau of Economic Analysis
The evidence is clear. Income tax revenues did increase after top marginal tax rates were decreased to 28%.
One can argue about what caused the increase in revenues. But the evidence clearly shows that lowering marginal tax rates to 28% did not reduce income tax revenues.
The evidence is clear. Income tax revenues did increase after top marginal tax rates were decreased to 28%.
It is not just income tax rates. It is also about write-offs and capital gains rates as well.
Are you referring to capital gains tax rates in the 1980s, VangeIV? Not sure what point you are making?
"By 2003, Mr. Bush grasped this lesson. In that year, he cut the dividend and capital gains rates to 15 percent each, and the economy responded. In two years, stocks rose 20 percent. In three years, $15 trillion of new wealth was created. The U.S. economy added 8 million new jobs from mid-2003 to early 2007, and the median household increased its wealth by $20,000 in real terms.
But the real jolt for tax-cutting opponents was that the 03 Bush tax cuts also generated a massive increase in federal tax receipts. From 2004 to 2007, federal tax revenues increased by $785 billion, the largest four-year increase in American history. According to the Treasury Department, individual and corporate income tax receipts were up 40 percent in the three years following the Bush tax cuts. And (bonus) the rich paid an even higher percentage of the total tax burden than they had at any time in at least the previous 40 years. This was news to the New York Times, whose astonished editorial board could only describe the gains as a “surprise windfall.” -- The Washington Times
'http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png'...
LMAO!
Good one larry g!
Yeah sesh nadathur the Bush tax cuts favored the evil rich and brought in less revenue...
The debt was 58.15% of GDP in 1990, a full 24 percentage points above its 1980 low. It continued to increase dramatically in the early 1990s, reaching 68.91% of GDP in 1994.
But then a Republican Congress was swept into power that year, the first time the GOP controlled both houses of Congress since 1954, and President Clinton tacked sharply to the center. In the next six years, while revenues increased 61%, federal outlays increased only 22%. The years 1998-2000 actually showed the first surpluses in the federal budget in 30 years. And the debt, relative to GDP, declined between 1994 and 2000 to 57.3% from 68.91%.
That decline ended in 2001 following the collapse of the dot-com bubble and rising unemployment in the resulting recession. By 2003 the debt-to-GDP ratio had risen to 61.7%. Many blame the Bush tax cuts for adversely impacting federal revenues, causing the debt to spiral upwards. But that is just not true. Federal revenues declined by almost 12% in the early years of the decade, but when the tax cuts fully kicked in in 2003, the economy began to grow strongly again and federal revenues increased 44% in the next four years, while unemployment fell to 4.2% from 6.2%. Federal outlays in those four years increased by only 26.4%, and while the debt-to-GDP ratio increased to 64.8% by 2007, that was still well below what it had been in 1994.
Only with the severe recession that officially began in mid-2007 did the debt-to-GDP ratio begin to soar once more. It reached 67.7% by Oct. 1, 2008, near the end of the Bush administration. A year later, under President Obama, it was at 84.4%, a year later still 93.8%. It is headed quickly towards 100% and beyond without fundamental change in how Washington handles the public fisc. -- WSJ
Debt to GDP was 68.91% in 1994 and 67.7% at the end of the Bush administration.
Clinton never submitted a balanced budget to Congress. Every budget he submitted called for more spending than the Republican congress ultimately approved and enacted. This was true with Bush as well. Every budget and/or spending proposal put forward by the Democrats during the Bush administration called for more spending than he had requested.
The Democrats look at the growth of the economy as a result, in part, of the tax rate reductions and assume that had the old rates been left in place they would have resulted in greater revenue. Nonsense. There is no evidence that the increase in economic growth would have materialized absent the tax rate adjustment.
Barack Obama inherited everything that he supported and voted for either as a senator or as president.
Not even the liberal Washington Post is buying Larry's arguments:
We looked at length at this issue earlier this year, assisted by new Congressional Budget Office data. The data showed that the biggest contributor to the disappearance of projected surpluses was increased spending, which accounted for 36.5 percent of the decline in the nation’s fiscal position, followed by incorrect CBO estimates, which accounted for 28 percent. The Bush tax cuts (along with some Obama tax cuts) were responsible for just 24 percent. Thus it is simply wrong to blame only the Bush tax cuts for the deficits now faced by the country, especially three years into another presidential term. ... -- The Washington Post
The Congressional Budget Office said Friday that President Barack Obama’s tax and spending policies will yield $6.4 trillion in deficits over the next decade, more than double the shortfall in CBO’s own fiscal baseline — even after taking credit for reduced war costs ... The nonpartisan office is bound by rules that require it to assume that all of the Bush-era tax cuts will end in December, for example. At the same time, it must build-in spending assumptions that major health programs like Medicare and Medicaid continue to grow unchecked. For example, CBO estimates that Obama’s budget will cut revenues by $2.35 trillion below its baseline, but that assumes he also gets about $1 trillion in tax increases that many in the GOP oppose. ... “Today’s analysis serves as a disappointing reminder of this administration’s broken promises and failed leadership when it comes to averting the most predictable economic crisis in our history,” Ryan said in response to the CBO numbers. “When it comes to our generation’s greatest challenges, the President refuses to take accountability or demonstrate much-needed leadership.” -- Politico
In words and pictures so simple even larry g should grasp it: Washington’s new normal: Obama’s permanently higher level of spending
i am so sick of this BS narrative that "tax cuts favor the rich".
this is so badly framed as to be senseless.
the top 10% pay 70% of income taxes. the top 50% pay ALL of the income taxes.
this, it is not even possible for a tax cut (barring negative rates) to favor the lower classes. they are not paying taxes anyway.
if we cut everyone's taxes by 10%, then the rich, who pay 70% of taxes get 70% of the gain. the poor, paying no taxes, have nothing to cut.
the honest framing here is that our tax code massively favors the poor to the extent that there is no way (short of negative tax rates) to possible give them any more income tax aid.
as mark has shown us in the past, the US already has the most progressive tax code in the oecd and is a whopping 21% points over the oecd average in this respect.
http://mjperry.blogspot.com/2011/03/us-has-most-progressive-tax-system-for.html
(note, this study includes fica and all other federal taxes, the top 10% pay 70% of income tax)
enough of this "tax cuts favor the rich" nonsense. the real issue is how badly the tax code shafts the rich and how, despite that, our class warrior in chief insists on vilifying them and demanding their "fair share".
" Again, you missed the point. Lower rates saw increased revenue not decreased. Spending is an entirely different topic. "
WTF?
If you cut rates and the increased revenue does not exceed the loss of revenue from the cuts - you go into deficit.
That IS the point.
Bush and company thought they could cut taxes and increase spending because "in theory" - the cut taxes would INCREASE revenues.
But if they actually did - they never "balanced" the revenue loss and as a result, we ended up with a structural deficit to the tune of 1.5 trillion and a 15 trillion debt that will be 20 trillion in 3 years.
cutting taxes while you are building an unsustainable debt as a direct result is just plain dumb.
Larry,
"..we ended up with a structural deficit to the tune of 1.5 trillion and a 15 trillion debt that will be 20 trillion in 3 years."
You keep throwing in "structural" as if that somehow means your hero was helpless to do anything about the problem. He had 2 years of massive majorities and, despite his weak-tea promises to cut the deficit in half, blew out the budget to levels that made Bush look like extremely responsible. Over 5 trillion of that 15 trillion(actually 15.7 trillion) comes directly from Obama.
"cutting taxes while you are building an unsustainable debt as a direct result is just plain dumb."
Guess what? Bush isn't President. But if he was dumb, what does that make Obama? He keeps touting all his tax cuts(the dumbest kind possible) while burying us under a super volcano of debt.
" You keep throwing in "structural" as if that somehow means your hero was helpless to do anything about the problem. He had 2 years of massive majorities and, despite his weak-tea promises to cut the deficit in half, blew out the budget to levels that made Bush look like extremely responsible. Over 5 trillion of that 15 trillion(actually 15.7 trillion) comes directly from Obama."
the 5 trillion was not approved by Obama. what caused it was already in the budget when he took office.
"cutting taxes while you are building an unsustainable debt as a direct result is just plain dumb."
Guess what? Bush isn't President. But if he was dumb, what does that make Obama? He keeps touting all his tax cuts(the dumbest kind possible) while burying us under a super volcano of debt.
Bush is not President but Bush and his Congress built the budget that is 1.5 trillion in annual deficit.
The only thing that can legitimately put at Obama's feet is the requested spending for the stimulus - about a trillion that he requested and Congress approved.
Even the TARP was what Bush requested ....
It is correct to say that Obama "presided" over the ...continuing deficits... but Obama did not request the things that caused the deficits - that came from Bush who asked for, and got, money for two wars, Medicare Part D and tax cuts.
Once those things were approved, the budget went into deficit and that deficit - continues.. until it gets cut.
It's true that Obama did not cut it but it's not true that he caused it. He did not.
that's the truth.
right here:
http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png
"If you cut rates and the increased revenue does not exceed the loss of revenue from the cuts - you go into deficit." -- Larry
Was that comment supposed to be in English? Think about that sentence and get back to us.
"... we ended up with a structural deficit to the tune of 1.5 trillion and a 15 trillion debt that will be 20 trillion in 3 years." -- Larry
We ended up with a "structural deficit", as you call it, because Obama and the Democrats chose to define a one time increase in the level spending, meant to address the financial crisis, as the new baseline.
I notice that the Obama apologists, while continually arguing that we should return to the Clinton era levels of taxation, never insist that we return to the Clinton era levels of spending. Why do you think that is?
larry-
"
If you cut rates and the increased revenue does not exceed the loss of revenue from the cuts - you go into deficit.
That IS the point."
if you think that is the point, then it's very clear that you do not understand the point. that whole statement is a self contradictory mess.
if you cut rates and revenue goes up, then you have, wait for it, MORE revenue. the notion that then you have to factor in reduced revenue from cuts is absurd. you just said that revenue went up.
revenue cannot go up and down at the same time.
if the cut upped revenues, it cannot simultaneously reduce them and create a deficit. cut, increase revs, that's it. there is nothing else to factor in.
when cap gains were cut in 1997, not only did revenues go up as a % of gdp, but gdp growth went up too. that means more of a bigger pie.
there is no magical "lost revs from cuts" to take out of that. nominal revenue SOARED.
you are just all tangled up in yourself and using bad math and weird double counting.
Larry,
"the 5 trillion was not approved by Obama. what caused it was already in the budget when he took office."
God. It wasn't? Not even the stimulus? How about the $440 billion omnibus spending he signed in 2009? Why didn't he veto the over-spending until Congress sent him a balanced budget? I really can't decide if you're just a moron or that dishonest.
"The only thing that can legitimately put at Obama's feet is the requested spending for the stimulus - about a trillion that he requested and Congress approved."
Oh, so some of that $5 trillion is his responsibility after all.
"Even the TARP was what Bush requested ...."
Bush was not going to release the 2nd half of TARP funding, but on Jan. 12, 2009, Obama asked Bush to release the remaining TARP funds for Obama to spend as soon as he took office. So there's $200 billion more. Further, most of that TARP money was paid back so that should have actually helped Obama. Instead, he just pissed right back out window.
"It is correct to say that Obama "presided" over the ...continuing deficits... but Obama did not request the things that caused the deficits - that came from Bush who asked for, and got, money for two wars, Medicare Part D and tax cuts."
And your Social Security checks, and your Medicare, and farm subsidies, and food stamps for Obama voters, and pensions for worthless federal government civilian employees, and school funding, and etc..
You can't just pick and choose, Larry. It's all the spending, most of which Bush inherited too.
I really love how Obama and his flunkies continue to blame Bush for the debt all the while they advocate even more spending. And Obama routinely threatens to veto any GOP attempts at reducing the handouts to bottom feeding Democrat voters.
" "If you cut rates and the increased revenue does not exceed the loss of revenue from the cuts - you go into deficit." -- Larry
Was that comment supposed to be in English? Think about that sentence and get back to us."
the supply-side "theory" supposes that if you cut taxes, increased economy activity will generate additional taxes.
the key here is - will the additional taxes generated be more than the revenues lost by cutting taxes?
The structural deficit is the annual deficit that occurs that came from prior years budgets that increased spending and/or cut taxes.
Once a budget spends more than tax revenues received - it causes a deficit, that will continue year after year as long as the increased spending continues and the tax cuts remain.
Obama did not create the structural deficit. It was there when he took office and it continues year after year until either the spending is reduced or taxes are put back to where they were originally - at the beginning of Bush's term ( at the rates that were in effect under Clinton/Reagan).
You can fairly blame Obama for the stimulus and TARP spending (even though the TARP was approved prior to Obama taking office) but both the TARP and Stimulus are not permanent increases in the budget.
And again.. neither of them could Obama spend a penny that was not approved by Congress.
Obama cannot spend money that Congress did not approve.
that's the reality here.
He can only spend what they approved.
"the 5 trillion was not approved by Obama. what caused it was already in the budget when he took office. Bush is not President but Bush and his Congress built the budget that is 1.5 trillion in annual deficit." -- Larry
"Bush and his Congress"? Who do you think controlled Congress at the onset of the financial crisis? Answer: The Democrats. They "built the budget that is 1.5 trillion in annual deficit". And Obama voted for all of that spending.
"The only thing that can legitimately put at Obama's feet is the requested spending for the stimulus - about a trillion that he requested and Congress approved." -- Larry
No, what the Democrats and Obama did was to use the increased spending levels associated with the "stimulus", and meant to be temporary, as the new budgeting baseline. In effect, they passed a new "stimulus" year after year and that is the cause of the "structural deficit" that you go on and on about.
"Even the TARP was what Bush requested ...." -- Larry
Yes, Bush requested the TARP funds. He used only half of that money supporting financial institutions that have largely paid it back. Obama gifted much of the rest of that money to the UAW through the GM and Chrysler bailouts which have not been paid back, and never will be.
"It's true that Obama did not cut it but it's not true that he caused it. He did not. that's the truth." -- Larry
Yes, he did cause it. Obama supported all of the housing policies that led to the financial crisis. He supported all of the spending following the onset of the crisis. He, as much as anyone, is to blame.
" if you cut rates and revenue goes up, then you have, wait for it, MORE revenue. the notion that then you have to factor in reduced revenue from cuts is absurd. you just said that revenue went up."
MORE revenue - yes.. but does it MORE THAN offset the loss from lowering the taxes?
cutting taxes by one dollar loses you one dollar of revenues unless in doing so - the increased economic activity that results generates at least a dollar more.
" Who do you think controlled Congress at the onset of the financial crisis? Answer: The Democrats. They "built the budget that is 1.5 trillion in annual deficit". And Obama voted for all of that spending."
WHO controlled Congress when:
1. taxes were cut
2. funding for two wars "off-budget" was approved
3. Medicare Part D was approved.
During the 8 years when Bush was prez - the DOD budget DOUBLED.
That was when the GOP controlled Congress.
"Yes, Bush requested the TARP funds. He used only half of that money supporting financial institutions that have largely paid it back. Obama gifted much of the rest of that money to the UAW through the GM and Chrysler bailouts which have not been paid back, and never will be."
Bush advocated for the auto bailouts. right?
"It's true that Obama did not cut it but it's not true that he caused it. He did not. that's the truth." -- Larry
Yes, he did cause it. Obama supported all of the housing policies that led to the financial crisis. He supported all of the spending following the onset of the crisis. He, as much as anyone, is to blame."
huh?
what did the housing policies (that were already in place when Obama took office) have to do with the budget deficit caused by increased spending for DOD?
"the supply-side "theory" supposes that if you cut taxes, increased economy activity will generate additional taxes." -- Larry
Additional revenue, but so far so good.
"the key here is - will the additional taxes generated be more than the revenues lost by cutting taxes?" -- Larry
This is simply gibberish. If there is increased economic activity resulting in additional revenue as a result of tax rate reduction, there is no "revenues lost by cutting taxes".
" No, what the Democrats and Obama did was to use the increased spending levels associated with the "stimulus", and meant to be temporary, as the new budgeting baseline. In effect, they passed a new "stimulus" year after year and that is the cause of the "structural deficit" that you go on and on about."
any spending had to be approved by Congress.
show me where the stimulus approved was permanent and goes on year after year ....
the stimulus was a one-shot deal but the spending extended over 2-3 years but after that the stimulus is dead but the spending increases approved for DOD - go on - year after year...
" This is simply gibberish. If there is increased economic activity resulting in additional revenue as a result of tax rate reduction, there is no "revenues lost by cutting taxes". "
when you CUT taxes - you lose the revenue those taxes generated.
the question is does the increased economic activity that is supposed to result by cutting taxes - ends up generating additional tax revenues sufficient to offset the original cuts.
if you cut a dollar of taxes - you end up with a dollar of revenue lost.
In theory that dollar then goes to work in the economy and ends up generating sufficient additional economic gains (that will be taxed) and that increase in taxes gained from increased economic activity will offset the revenues lost from the tax cut.
"what did the housing policies (that were already in place when Obama took office) have to do with the budget deficit caused by increased spending for DOD?" -- Larry
Yes, and they were already in place when Bush took office. The Republicans in congress and the Bush adminstration tried on multiple occassions to reign in the GSEs and prevent a housing crsis. The Democrats, including Obama, thwarted those efforts. As for the increase in DOD spending, that has been factored into Bushs spending. Are you arguing that he is responsible for the attacks on Sept. 11th? Did he cause Katrina? How about the Tech crash just before he took office and the ensuing recession?
"WHO controlled Congress when:
1. taxes were cut
2. funding for two wars "off-budget" was approved
3. Medicare Part D was approved."
Obama "cut taxes" too, remember? Does he get any blame for the reduced payroll taxes and his dumb "Making Work Pay" stuff, or is he blameless since he's only the President of the United States?
Regarding #2 and #3, what was the deficit during those yrs until the Democrats took over in 2007?
"what did the housing policies (that were already in place when Obama took office) have to do with the budget deficit caused by increased spending for DOD?"
Love how you ignore Che's remarks and instead construct a premise built mostly of bullshit.
"huh?"
You obviously say that alot.
" Yes, and they were already in place when Bush took office. The Republicans in congress and the Bush adminstration tried on multiple occassions to reign in the GSEs and prevent a housing crsis. "
a timeframe?
did the credit default swaps that caused the housing crisis suddenly happen in 2006?
How did the GSE's cause the housing crisis when the housing bubble happened in many other countries also?
Did the idea behind MBS spread worldwide?
"show me where the stimulus approved was permanent and goes on year after year ...."
I've already shown you how stimulus funded food stamps expansion are not a permanent part of the budget baseline. But here you go.
You can also look at the federal budget since 2009, when the stimulus was passed. A "one shot" deal should have resulted in budget reduction once the package was spent. Instead, spending has only gone up under your hero.
"WHO controlled Congress when:
1. taxes were cut
2. funding for two wars "off-budget" was approved
3. Medicare Part D was approved."
"Obama "cut taxes" too, remember? Does he get any blame for the reduced payroll taxes and his dumb "Making Work Pay" stuff, or is he blameless since he's only the President of the United States?"
that was done for stimulus. It was NEVER claimed to result in increased tax revenues. It was NEVER characterized as supply-side tax cuts that would end up boosting revenues. It was acknowledged from the get go as a 'cost' and not a benefit to the budget.
"Regarding #2 and #3, what was the deficit during those yrs until the Democrats took over in 2007?"
check this chart:
http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png
you can clearly see how the deficit progressed.
"what did the housing policies (that were already in place when Obama took office) have to do with the budget deficit caused by increased spending for DOD?"
Love how you ignore Che's remarks and instead construct a premise built mostly of bullshit.
"huh?"
You obviously say that alot.
only when someone says something that makes no sense. The housing crisis did not cause the deficit and debt...
it's yet another "Obama did it" narrative that simply does not follow. The housing crisis was well under way when he took office and it was well under way even before the Dems took Congress in 2006.
"any spending had to be approved by Congress. show me where the stimulus approved was permanent and goes on year after year ...." -- Larry
And it was - a Democratic congress!
Obama chose not to reverse that elevated level of spending; thus he, along with congressional Democrats, are responsible for it. Only by establishing 2009 as the new baseline, something Republican budget hawks like Paul Ryan feared would happen, does Obama come off looking like a tightwad. Obama has turned a one-off surge in spending due to the Great Recession into his permanent New Normal through 2016 and beyond. -- The American Enterprise Blog
"How did the GSE's cause the housing crisis when the housing bubble happened in many other countries also?" -- Larry
This is topic that has been covered extensively on this blog. Do a search of your own and read the comments.
"Did the idea behind MBS spread worldwide?" -- Larry
In some important ways, yes. Start your reading HERE
your "reference" says 1000 days since the Dems have done a budget.
What budget is being used then?
Isn't it continuing resolutions of the last budget?
the stimulus is not permanent - the chart shows that.
here's the chart you keep ignoring:
http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png
this chart shows what spending was done under whose Presidency and what effect it had on the budget/deficit/debt.
the chart in your reference is non-nonsensical.
How can the Dems not pass a budget in 1000 days and the Chart show a Obama Budget?
larry-
2 things determine tax revenues:
gdp size and the % of gdp collected as taxes.
when cap gains were cut in 1997, GDP growth accelerated increasing the size of the pie.
taxes as a % of GDP also went up increasing the share of the pie.
so you got more of a bigger pie.
there is no "lost revenues" component.
when top marginal rates rose in 1993, neither of those things happened.
go back and read my post from 8.54.
you are literally just spouting gibberish and trying to apply part of an equation twice because you misunderstand laffer.
" In some important ways, yes. Start your reading HERE "
Che - the banks that went belly-up where almost universally not FDIC.... guy
most of these companies that were dealing in MBS were not recognized nor regulated as "banks".
"most of these companies that were dealing in MBS were not recognized nor regulated as "banks". -- Larry
The Recourse Rule under Basil I "extended the accord's risk differentiations to asset-backed securities (ABS): bonds backed by credit card debt, or car loans — or mortgages — required a mere 2 percent capital cushion, as long as these bonds were rated AA or AAA or were issued by a government-sponsored enterprise (GSE), such as Fannie or Freddie. Thus, where a well-capitalized commercial bank needed to devote $10 of capital to $100 worth of commercial loans or corporate bonds, or $5 to $100 worth of mortgages, it needed to spend only $2 of capital on a mortgage-backed security (MBS) worth $100. A bank interested in reducing its capital cushion — also known as "leveraging up" — would gain a 60 percent benefit from trading its mortgages for MBSs and an 80 percent benefit for trading its commercial loans and corporate securities for MBSs."
Banks were encouraged, through government policy, to hold the MBS that the GSEs were producing as part of what the article terms their "minimum capital cushion". This policy spread to foreign banks as well:
"What about the rest of the world? The Recourse Rule did not apply to countries other than the United States, but Basel I included provisions for even more profitable forms of "capital arbitrage" through off-balance-sheet entities such as structured investment vehicles, which were heavily used in Europe. Then, in 2006, Basel II began to be implemented outside the United States. It took the Recourse Rule's approach, encouraging foreign banks to stock up on GSE-issued or highly rated MBSs."
It didn't matter that these banks were not "dealing in MBS" they were, at the behest of the government, loading up their portfolios with this garbage.
You need to broaden your reading beyond Wikipedia.
Holtz-Eakin also notes that the Center blames the 2009 deficit on Bush even though that year includes the $821 billion stimulus bill. "There was a LOT of activity in the final nine months [of fiscal 2009] that had nothing to do with Bush," he says. In addition, the 2009 deficit included two massive one-time-only expenditures: the Troubled Asset Relief Program and the bailout of Fannie Mae and Freddie Mac. But spending did not plunge after that. "The fact that spending remains as high as [2009's] means that Obama has replaced temporary spending with persistent spending," says Holtz-Eakin. -- Washington Examiner
" You need to broaden your reading beyond Wikipedia."
Are you saying that there was essentially a worldwide govt conspiracy to promote housing via MBS and "Basil I"?
What did the US FDIC have to do with that?
" In addition, the 2009 deficit included two massive one-time-only expenditures: the Troubled Asset Relief Program and the bailout of Fannie Mae and Freddie Mac. But spending did not plunge after that. "The fact that spending remains as high as [2009's] means that Obama has replaced temporary spending with persistent spending,"
how could he do that without Congress approving it?
This comment has been removed by the author.
"It was NEVER claimed to result in increased tax revenues. It was NEVER characterized as supply-side tax cuts that would end up boosting revenues. It was acknowledged from the get go as a 'cost' and not a benefit to the budget."
First: so? The Obama tax cuts still added to the deficit you keep claiming is not his fault.
Second: his specific tax-cuts are supposedly temporary, targeted gimmicks, not supply-side tax cuts.
So it's good they are at least not arguing they will boost revenues.
I would also say it is wrong for anyone to claim the portion of the Bush tax-cuts that removed millions of people from the income tax roles somehow increased revenue.
larry-
this is so simple even you can understand it.
it works like this.
the cra created terrible incentives for lending. the GSE's magnified this and added enormous liquidity to the us market. being 40% of the market nearly doubles its size. this freed up tons of money for banks to lend again or to gain mortgage exposure worldwide, often by buying MBS's many of which were only made possible and rated AAA because of the GSE stamps on the loans.
this is why so many euro banks wound up with heavy exposure to gse loans. it was seen as diversification. we bought their MBS's, they bought ours.
inflamed by the massive liquidity from the gse's and the low interst rates in the us that, because the dollar is the vehicle and anchor currency for the world were exported, led to a monstrous increase in global liquidity, markets worldwide went ballistic and we got a worldwide housing bubble. liquidity does not respect borders.
blaming the bubble on MBS's is like your letting a nasty bioweapon loosed at JFK and then, when the whole world dies, blaming it on airplanes.
mbs's were a vehicle for contagion, but not the root cause. that was overliquidity driven by the GSE's and bad fed policy.
"how could he do that without Congress approving it?"
You play this dishonest "poor, helpless Obama" game even while blaming Bush for his own reckless spending. It's so pathetic and convinces nobody.
Anyway, Obama could veto the spending bills Congress sends him. He could stop submitting budgets that pile up debt into the stratosphere. He could use the bully pulpit to ask the public to demand fiscally responsible budgeting by the Congress. He could stop appointing deficit commissions and actually embrace their recommendations. Has he done any of that?
That answer your question?
First: so? The Obama tax cuts still added to the deficit you keep claiming is not his fault.
I claimed that the deficit that was already in place was not his fault and the stimulus is temporary - not permanent like the DOD spending is.
"Second: his specific tax-cuts are supposedly temporary, targeted gimmicks, not supply-side tax cuts.
So it's good they are at least not arguing they will boost revenues."
indeed.. they COULD HAVE but they had the stones to not make that claim.
"I would also say it is wrong for anyone to claim the portion of the Bush tax-cuts that removed millions of people from the income tax roles somehow increased revenue. "
yes.. good point.
are you saying that tax cuts to the wealthy produced increased revenues and tax cuts to the un-wealthy did not have that effect?
re: " the cra created terrible incentives for lending. the GSE'"
what percent of sub-prime loans were CRA?
my understanding is that it was a small percentage and an even smaller percentage were FDIC.
Are you saying that US policies caused the world wide housing bubble/meltdown?
Morganovich,
"the cra created terrible incentives for lending."
That's actually putting it mildly. Obama worked as a lawyer for ACORN in the '90's and sued Citibank on ACORN's behalf to get the bank to give mortgages to people who couldn't pay them off. Obama also worked closely with Madeline Talbott, the field director for ACORN's efforts in spreading the CRA poison into the financial system as a whole. They found eager participants in the Clinton administration like Henry Cisneros. ACORN representatives even met with Clinton himself in 1994 about spreading CRA to non-banks. Accordig to ACORN political director Zach Polett, "Clinton jumped on this like white on rice."
He promised ACORN to use executive powers to ram this through rather than get bogged down via the legislative process. And so he did.
" Obama worked as a lawyer for ACORN in the '90's and sued Citibank on ACORN's behalf to get the bank to give mortgages to people who couldn't pay them off."
aw geeze..more anecdotal CANARDS
the vast, vast majority of sub-prime loans had nothing what-so-ever to do with CRA....
http://www.businessweek.com/investing/insights/blog/archives/2008/09/community_reinv.html
CRA ONLY SAID that a bank that was located in a community - had to make loans in that community -nothing more.
They never required lowered standards.
this is where people simply refuse to recognize the realities....
the urge to blame Obama is so high that all matter of common sense and facts just goes out the window..
The primary fault of the govt was to buy/back the sub-prime loans ... but the sub-prime loans themselves were creations of the banking community who used the GSE backing to mitigate (they thought) their risk...
Larry,
"I claimed that the deficit that was already in place was not his fault and the stimulus is temporary - not permanent like the DOD spending is."
The debt that was already in place was not totally his fault though he did vote for much of it as a Senator. The almost $6 trillion he's ran up since then definitely is his fault.
".they COULD HAVE but they had the stones to not make that claim."
Sure, they could have claimed tax gimmicks are the same as supply side tax cuts. Obama makes alot of idiotic claims. For example, he just claimed yesterday he has spent the past 3 years "cleaning up" the debt the GOP left him.
"..are you saying that tax cuts to the wealthy produced increased revenues and tax cuts to the un-wealthy did not have that effect?"
Yes.
It would seem to me to be nearly impossible for lower earners to generate enough activity to make up for them being completely removed from the income tax roles.
"aw geeze..more anecdotal CANARDS"
What's the canard? Are you saying I'm incorrect about Obama's suit against Citibank?
"the vast, vast majority of sub-prime loans had nothing what-so-ever to do with CRA...."
Once again, so? As I said, ACORN worked overtime and successfully to spread subprime loans modeled after CRA provisions across the entire financial system. Obama was a part of that as a community organizer parasite working with ACORN.
"the urge to blame Obama is so high that all matter of common sense and facts just goes out the window.."
I love this coming from someone who can always be counted on to lick Obama's boots, no matter how ridiculous it looks.
Are you referring to capital gains tax rates in the 1980s, VangeIV? Not sure what point you are making?
I believe that when Clinton cut capital gains rates revenues exploded.
"I claimed that the deficit that was already in place was not his fault and the stimulus is temporary - not permanent like the DOD spending is."
The debt that was already in place was not totally his fault though he did vote for much of it as a Senator. The almost $6 trillion he's ran up since then definitely is his fault."
he did not run up 6 trillion. It had to be approved by others.
".they COULD HAVE but they had the stones to not make that claim."
Sure, they could have claimed tax gimmicks are the same as supply side tax cuts."
nope. they never claimed it would work like the supply siders say.
"Obama makes alot of idiotic claims. For example, he just claimed yesterday he has spent the past 3 years "cleaning up" the debt the GOP left him. "
well he has... and he's not done.
"..are you saying that tax cuts to the wealthy produced increased revenues and tax cuts to the un-wealthy did not have that effect?"
Yes.
"It would seem to me to be nearly impossible for lower earners to generate enough activity to make up for them being completely removed from the income tax roles. "
why would you assume tax cuts would have different effects and if you did would you differentiate between saving the money, investing the money or spending the money?
spending the money has a much quicker more direct effect on the economy, right?
re: Obama/citibank
he did not require Citibank to make subprime loans.
re: Acorn
Acorn did not require banks to make subprime loans.
"the urge to blame Obama is so high that all matter of common sense and facts just goes out the window.."
I love this coming from someone who can always be counted on to lick Obama's boots, no matter how ridiculous it looks.
boot-licking? bahahahahahahha
Look - Obama is a politician.
He does what all politicians do.
He cannot spend money that Congress does not give him.
Neither could Bush.
you can hate Obama and love Bush.. but what does that have to do with boot-licking?
did you boot-lick Bush?
Take a look at this table of tax receipts by year. Tax receipts clearly fell off immediately after the Bush tax cuts, and the bounce back was small. Growth in tax revenues was small under Bush.
Bush is the first President since Eisenhower to preside over an administration that actually saw a reduction in revenue. The Bush reduction was even greater than Eisenhower, making Bush the worst performer by this measure.
Reagan is a similar story, though not quite as bad as Bush. Tax revenue increases were much higher under Carter and Clinton. The data don't show that tax reductions resulted in an increase in tax revenue.
re: revenues went down..
and stayed down... pretty much...
this chart:
http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png
shows clearly that the tax cuts took the country into deficit - and it never recovered....it just spiraled further down.
"he did not run up 6 trillion. It had to be approved by others."
You persist with this stupid game that fools nobody. Poor Obama, he's helpless. He's only the President of the United States of America.
"well he has... and he's not done."
He's run up almost 6 TRILLION. How is that not making the debt mess even worse? Better question: just how stupid are you?
"why would you assume tax cuts would have different effects and if you did would you differentiate between saving the money, investing the money or spending the money?"
Surprise. You have zero grounding in supply-side theory. Go look it up.
"he did not run up 6 trillion. It had to be approved by others."
You persist with this stupid game that fools nobody. Poor Obama, he's helpless. He's only the President of the United States of America."
he's certainly not helpless but he cannot spend money without others approving it.
"well he has... and he's not done."
He's run up almost 6 TRILLION. How is that not making the debt mess even worse? Better question: just how stupid are you?
Nope. He has NOT run up 6 trillion. He inherited more than 4 trillion from previous Congressional spending and he got 2 more from this Congress.
"why would you assume tax cuts would have different effects and if you did would you differentiate between saving the money, investing the money or spending the money?"
Surprise. You have zero grounding in supply-side theory. Go look it up.
well not totally. I've read up on it but "theory" is not practice. I have to see real results before I'm convinced and so far we have a lot of theory and not much real proof.
perhaps you can point me to a reference you like that compares and contrasts tax cuts according to demographic income strata.
"Take a look at this table of tax receipts by year. Tax receipts clearly fell off immediately after the Bush tax cuts, and the bounce back was small. Growth in tax revenues was small under Bush." -- Jon
Your chart does not show that. You had better look again.
Che, use constant 2005 dollars, not nominal dollars. Bush is the worst performer.
Below is a graphic that focuses on the results of fiscal policy, not simply on adjustments made on the margins of fiscal policy. If anything, the analysis is overly generous to President Obama because: (1) it assigns full responsibility for Fiscal Year 2009 to President Bush, despite the enactment by Obama of the stimulus, higher domestic appropriations and an expansion of TARP spending during that year; and (2) it gives Obama credit for the policies he intends to enact for the rest of his presidency, since we cannot judge his actual future record. The graphic compares the records of these two presidents based on the deficits, revenues and spending incurred by the federal government on their watch, expressed as a percentage of GDP. -- The Daily Caller
"Che, use constant 2005 dollars, not nominal dollars. Bush is the worst performer." -- Jon
Again, you're wrong. Revenues did not go done shortly after Bush lowered tax rates.
There is another factor at work when you lower rates. It encourages corporate executives to divert more money from employees to themselves. This is why you see a correlation between low top tax rates and widening income inequality.
"There is another factor at work when you lower rates. It encourages corporate executives to divert more money from employees to themselves. This is why you see a correlation between low top tax rates and widening income inequality." -- Mike259259
Income inequality has completely changed since the Great Recession began in late 2007. The long established upward trend has abruptly reversed itself, such that inequality is back where it was in about 1997. Moreover, inequality over the last decade is characterized by extreme volatility, owing to extreme volatility in capital gains, the stock market, and the economy. It is therefore no longer legitimate--if it ever was--to simply draw a line between two years and claim a trend in income inequality.
As a result, it is not evident that the Bush tax cuts in either the top marginal rate or capital gains rate had any long-term effect on inequality. If anything, they appear to have reduced inequality. Therefore, a return to Clinton-era tax rates would not necessarily reduce inequality. The Clinton- and Bush-era tax cuts in the capital gains rate may have resulted in more volatility in capital gains realizations, and thus affected volatility in the stock market, but this remains speculative. -- The Tax Prof
Thanks for playing.
Paul: "Surprise. You have zero grounding in supply-side theory. Go look it up."
I guess that's sarcasm. I don't think there's any surprise there. :)
"Nope. He has NOT run up 6 trillion. He inherited more than 4 trillion from previous Congressional spending and he got 2 more from this Congress."
Ok, that's incoherent but whatever. How is that "cleaning up" the debt? HOW?
"well not totally. I've read up on it but "theory" is not practice."
You obviously haven't read anythig more than article or 2, probably from the perspective of some left-wing douche like Krugman. Or the Media Matters crew writing from their mothers' basements.
"perhaps you can point me to a reference you like that compares and contrasts tax cuts according to demographic income strata."
Top of my head, try Paul Craig Roberts: "Supply Side Revolution." Jude Wanniski:"The Way the World Works." Robert Bartley: "The 7 Fat Years." George Gilder: "Wealth and Poverty."
FYI, I'm going to seriously reduce my responses to you, if not eliminate. It's obvious you usually don't know what you're talking about, and you frame it all in such a dishonest manner that it's no point even replying.
Either that, or like VangelV said, you're just playing games with everyone here.
re: the "graph" and "spending".
The spending under Obama was approved when and by which Congress?
The increases for DOD, Homeland Security, Iraq/Afghanistan, and Medicare Part D were all approved under Bush - and that spending stayed in the budget permanently.
that increased spending took the budget into deficit from a balanced budget.
the only way to stop that spending would be to have Congress take DOD funding back to 2000 levels, repeal Medicare Part D, zero fund Afghanistan and Iraq and Homeland Security.
Obama did not approve the funding for any of the above things yet the spending for them is still in the budget and still causing a deficit - every year.
I just noticed the graph that Che supplied...
http://dailycaller.com/2011/07/30/obamas-and-bushs-real-effects-on-the-deficit-in-one-graph/obama2-8/
where it ostensibly "compares" Bush vs Obama but the footnote says this:
"Obama is the average of 2010-2016.
think about that...
"Obama is the average of 2010-2016. think about that..." -- Larry
Did you read the article? First, he put's all of Obama stimulus on Bush. Next, He gives Obama credit for savings and spending reductions that he claims he will realize and enact if he has a second term. In effect, he has stacked the deck heavily against Bush and still Obama comes out looking like a turd.
Think about that.
well..you did not post the article, just the graphic.
did they include repeal of the Bush Tax cuts on the 2010-2016 data?
would that chart be the same if Obama did not get a second term?
"well..you did not post the article, just the graphic."
Jesus, Larry, are two links in one comment too much for you? Look again.
Does nothing embarrass you?
there were two links? geeze.. that would make that post TWICE as worthless!
attributing deficit and debt to Obama for 2013-2016 just shows how dumb those worthless links were anyhow.
VangeIV,
You are correct that when Clinton and the Republican Congress slashed capital gains tax rates, capital gains tax revenues subsequently soared.
I thought you were referring to the 1980's. As I'm sure you know, Reagan actually signed off on a capital gains tax rate increase.
"there were two links? geeze.. that would make that post TWICE as worthless!"
And you wonder why people quit responding to you?
" And you wonder why people quit responding to you?"
huh? you did, right?
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