|"Only dull people are brilliant at breakfast"
|"The liberal soul shall be made fat, and he that watereth, shall be watered also himself."
-- Proverbs 11:25
Even if all of the Bush tax cuts are allowed to expire as scheduled, the projected cost of the Bush tax cuts to the federal budget over the next ten years is $3.9 trillion, an average of 1.4 percent of the country’s total economic activity (GDP) per year. Those asking for more permanent tax cuts continue to justify the cost, claiming tax cuts create jobs.
But their analysis ignores what actually happened during the economic cycle that began in March 2001 and ended in December of 2007—which almost exactly coincides with the Bush presidency and the implementation of the Bush tax cuts. This period registered the weakest jobs and income growth in the post-war period. Overall monthly job growth was the worst of any cycle since at least February 1945, and household income growth was negative for the first cycle since tracking began in 1967. Women reversed employment gains of previous cycles. And for African Americans, the worst job growth on record was matched by an unprecedented increase in poverty.
Given this incredibly weak record, it is astounding that some conservative members of Congress held up—and eventually voted against—the Obama administration’s economic stimulus and recovery package because it did not contain additional permanent tax cuts. The anemic Bush economic cycle directly contradicts the idea that those tax cuts delivered broad-based economic growth and job creation—never mind the promise of long-term economic growth so quickly squelched by the onset of the recession beginning in December 2007.
Labels: economic death watch