# What has been the economic effect of Bush's tax cuts? **URL:** \ **Category:** Great Debates\ **Created:** [October 3, 2004, 2:43am UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277 "2004-10-03T02:43:31Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [October 3, 2004, 5:54pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/21 "2004-10-03T17:54:23Z")
> [@BrainGlutton](#): > > The economies of Europe might not be as productive as ours per capita, but by any reasonable standard they are indeed thriving and growing economies, despite having massive welfare states and a lot of GDP in the tax-and-spend public sector and intrusive economic and environmental regulations and politically powerful labor unions. And in terms of negative social indicators such as crime, poverty, homelessness, illiteracy, malnutrition, infant mortality, etc., etc., they are much **healthier** societies than ours. You have cites for all of this, right? And, of course, you can explain the brain drain from Europe to America? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [October 3, 2004, 7:06pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/22 "2004-10-03T19:06:30Z")
> [@qts](#): > > You have cites for all of this, right? And, of course, you can explain the brain drain from Europe to America? So glad you asked! 🙂 From “The American Paradox,” an article by Ted Halstead, in the February 1, 2003, edition of _The Atlantic Monthly_ – [http://www.newamerica.net/index.cfm?pg=article&DocID=1155:](http://www.newamerica.net/index.cfm?pg=article&DocID=1155:) > [@](#): > > Nothing illustrates America’s profound contradictions more starkly than a comparison with other advanced democracies: among these the United States is either the very best or the very worst performer on a wide range of social and economic criteria. We are simultaneously the leader and the laggard among our peers—almost always exceptional, almost never in the middle. > > Without question we are the richest, most powerful, and most creative nation on the planet. Our economic and military might stems from our embrace of a particularly high-octane brand of capitalism, supported by financial markets that are deeper and broader than any others, labor markets that are more flexible, and a culture of entrepreneurialism that is unparalleled. These attributes have turned America into the world’s unrivaled engine of innovation and wealth creation. We boast more patent applications than the entire European Union; almost three times as many Nobel laureates as Britain, our closest competitor; and more business start-ups per capita than almost every other advanced democracy. One in twelve Americans will start his or her own business, evincing another outstanding American trait—our great tolerance for risk. And our export of movies, television shows, music, and fast-food chains makes us, for better or worse, the dominant cultural force on the globe. > > But like the Roman god Janus, America has two faces. Despite being the richest nation on the planet, we suffer from higher rates of poverty, infant mortality, homicide, and HIV infection, and from greater economic inequality, than other advanced democracies. We have far more uninsured citizens, and a lower life expectancy. On a per capita basis the United States emits considerably more greenhouse gases and produces more solid waste. We spend more per student on K-12 education than almost all other modern democracies, yet our students perform near the bottom on international tests. We have the highest rates of teen pregnancy and among the highest proportions of single parents, and American parents have the least amount of free time to spend with their children; indeed, the average American works nine weeks more each year than the average European. Our performance on many social indicators is so poor, in fact, that an outsider looking at these numbers alone might conclude that we were a developing nation. > > How do we reconcile these two faces of America? To a remarkable degree the United States seems to have exchanged social cohesion and a broad-based middle class for economic dynamism and personal freedom. Have we abandoned what used to be referred to as the common good? > > \ > > THE TWO FACES OF AMERICA > > This list of “bests” and “worsts” is based on a variety of sources—including statistics from the United Nations, the Organization for Economic Cooperation and Development, and a number of other groups and experts—but the basic criteria are consistent. Among advanced democracies, America had to rank in the top three for a category to be listed under “bests” and in the bottom three for a category to be listed under “worsts.” (Where applicable, all rankings were determined on a rate basis or as a percentage of population.) > > **Bests-------------------------------------------------Worsts** > > Gross domestic product------------------------------Poverty > Productivity---------------------------------------------Economic inequality > Business start-ups------------------------------------Carbon-dioxide emissions > Long-term unemployment---------------------------Life expectancy > Expenditure on education---------------------------Infant mortality > University graduates----------------------------------Homicide > R&D expenditure---------------------------------------Health-care coverage > High-tech exports--------------------------------------HIV infection > Movies exported---------------------------------------Teen pregnancy > Breadth of stock ownership--------------------------Personal savings > Volunteerism--------------------------------------------Voter participation > Charitable giving---------------------------------------Obesity As for the “brain drain” – isn’t it obvious? Highly educated professionals can make a lot of money here, and **America is a very good place to be rich.** That doesn’t mean that the things that make it so are good for the rest of us. I call the above a bad bargain. A real bargain, but a bad bargain still. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [October 3, 2004, 7:22pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/23 "2004-10-03T19:22:31Z")
I’m in the middle of something else right now, so I’ll come back and respond later tonight. But I want to clear up 2 things. > [@BrainGlutton](#): > > You seem to be talking, in a circuitous way, about inflation. No, I am not talking about inflation at all. > [@](#): > > And what do you mean, “the value does not live in the money”? Of course it doesn’t; you can’t wear money or eat it. So what? A dollar, or any unit of currency, represents a claim on an infitesimal but very real fraction of the total of the goods and services and assets in the economic sphere within which it can be spent; Ah, here is where you make the mistake. This is the proverbial zero sum game. Money does not represent a claim on the currently extant economic goods. It represents a measure of the values which were exchanged when the money was exchanged. What it is worth today has to do only with the current value of any good or service. > [@](#): > > And what’s this about the “moral structures”? What has that to do with economics? It is possible for a given society to be morally corrupt and economically prosperous at the same time – look at prewar Nazi Germany. Well, here again, your socialism confuses things a little. I am not talking about any sort of collective morallity. I am talking about personal morality. As in a hierarchy of ‘values’. Within any such hierarchy particular goods or services will rise and fall. Especially in relation to the value of the dollars recieved for various activities. Dollars recieved without an exchange of values will by necessity be valued lower than dollars recieved based on such an exchange. I’m not talking about cultural values or collective values. I’m talking about personal valuation of goods and services. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [October 3, 2004, 7:51pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/24 "2004-10-03T19:51:19Z")
> [@pervert](#): > > Ah, here is where you make the mistake. This is the proverbial zero sum game. Money does not represent a claim on the currently extant economic goods. It represents a measure of the values which were exchanged when the money was exchanged. What it is worth today has to do only with the current value of any good or service. Clear as mud. What exactly is the difference between “currently extant economic goods” and “the values which were exchanged when the money was exchanged”? > [@pervert](#): > > Dollars recieved without an exchange of values will by necessity be valued lower than dollars recieved based on such an exchange. “Valued lower” by whom? If I’m poor and I get a $10 food stamp from the state, I can buy exactly as much food with it as I could with $10 of earned income. If I **am** the state, then $10 of tax revenue – $10 received without a **direct** exchange of values between state and taxpayer, although the taxpayer does benefit from public services – is worth exactly as much to me as $10 in income derived from some state-owned productive asset (like the crown lands in Britain, which produce rental income for the state). ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [October 3, 2004, 7:56pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/25 "2004-10-03T19:56:41Z")
> [@BrainGlutton](#): > > Clear as mud. What exactly is the difference between “currently extant economic goods” and “the values which were exchanged when the money was exchanged”? A difference in time, for one. > [@](#): > > “Valued lower” by whom? If I’m poor and I get a $10 food stamp from the state, I can buy exactly as much food with it as I could with $10 of earned income. Yes, but your own valuation of the money will be different. If you have to work two hours several miles away to get the $10, but only have to wait for the mail for the $10 food stamps you will value them differently. > [@](#): > > If I **am** the state, then $10 of tax revenue – $10 received without a **direct** exchange of values between state and taxpayer, although the taxpayer does benefit from public services – is worth exactly as much to me as $10 in income derived from some state-owned productive asset (like the crown lands in Britain, which produce rental income for the state). Well, again, I am talking about individual valuations, not collective ones. We can place anthorpomorphic characteristics on states, but they are not as illustrative as you think. For instance, in your example, the $10 is not the same. In the first case, simply demanding more income will produce an extra $10 dollars. In the second, you have to convince the renter to pay the extra $10 or you have to increase the amount of land rented. A different choice, and thus a different valuation. BTW, I am not saying that no value is recieved from government services. I agree that some value is provided to the taxpayer by government activities. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [October 3, 2004, 11:25pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/26 "2004-10-03T23:25:08Z")
> [@BrainGlutton](#): > > Why? The portion you quoted makes my assertion seem overly broad. I meant that the aqusition of money through trade will necessarily be valued more highly than the aquisition of money wihtout trade. The reason is that trade requires both parties to reach an agreement. As such, each side must give up something of value. In the case of social give aways of money, you have people giving up money without a coresponding voluntary acceptance of the value recieved and you have people recieving money without any requirement of giving up anything of value. > [@](#): > > To me, “socialism” means simply the belief that a classless society, without extremes of wealth or poverty and without glaring inequalities of political power, is a goal both desirable and achievable. It does not necessarily mean big government, nor does it necessarily mean small government; I’ll follow whatever path gets us there from here. This always sounds so nice. I used to believe it myself. But lets examine a few of the terms, shall we? [Classless:](http://en.wikipedia.org/wiki/Social_class) I assume you mean equality of social class. However, in order to apply that to capitalism, you have to make some rather large equivocations. From the wikipedia entry: \*"Using wealth as a dimension, many have used a bi-partite model to view societies, from ancient history to the present day: an Upper Class of the immensely wealthy and/or powerful a Lower Class of the poor and/or weak Karl Marx famously called this a division between the “ruling class” and the working class. Under slavery, this division corresponds to that between the slave-owners and the slaves, while under feudalism, it corresponds to that between lords and serfs. Under capitalism, the former (the capitalists or bourgeoisie) exploit the proletariat (wage-earners). See labor theory of value.\*" Note the equivocation of the relationship between capitalists and labor with the relationship between lords and serfs. While there may be some similarities, there are far more qualitative differences. If you mean classless in the sense that serfs are not legally bound to live on their ancestors farm and work it forever to the benifit of the lord, while the lord is not legally granted power over the serfs, then I agree with you. If, however, you mean to uphold the equivication between this relationship and that of the capitalist and laborer then I cannot agree with you. If that is the case, you have slipped from an equality of opportunities to an equality of outcomes. [QUOTE] But that does not mean a large state sector cannot play a valuable role in a healthy economy.[/QUTOE]I’m not sure I ever implied otherwise. But a large state sector and fully half of GDP are two different things, in my opinion. > [@](#): > > In the private commercial sector of the economy, nothing at all gets done unless somebody sees a way of making a monetary profit on it, and that in the short run. This statement is overly broad. Have you ever looked at the long term investments which are quite common? It takes decades to get the profit out of a modern mine and many millions of dollars. Have you looked into some of the long term research and development projects sponsered by private industry, not to mention private individuals? > [@](#): > > And – while you might disagree strongly on this point – some things **do** need to be done even though there is no way to make them profitable in that sense. I don’t think I ever indicated that this was untrue either. But becareful you are not eliminating the middle ground when you say that private investment are only for short term profits while some public expenditures are necessary. Neither of these proves or even implies the other. > [@](#): > > No private corporation or consortia of corporations would ever have built America’s interstate highway system; the expense was too great and the economic value too distant and diffuse. Well, this is simply not true. There was a highway system in place when Eisenhower decided to build the one we enjoy today. [Here is a history.](http://www.gbcnet.com/ushighways/history.html) _"At the beginning of the century, the supply of good roads was nowhere near the growing demand. Most roads at the time were little more than improved wagon trails. In fact, many of the major “highways” were actually vestiges of old trails, such as the Oregon Trail or Santa Fe Trail. There were paved highways, but most were cobblestone and almost all were in major cities. Good road organizations appeared to remedy this situation. The American Automobile Association and the Automobile Club of Southern California (they were separate organizations originally) were formed in California to promote better roads. Additionally, many trail associations were created to address the need of having marked interstate highways; this was the birth of the named highways. The Lincoln Highway, from New York to San Francisco was the first and by the early 1920s many highway organizations were formed which placed and promoted their own routes. By 1925 there were over 250 named highways, each with their own colored signs often placed haphazardly, a fact which created great confusion._" The federal government simply represented a scaling up of this popular program. But, lets be honest, road building is not the sort of thing we were talking about. Just in case, I’ll grant that law enforcement and criminal justice in general, road building and transportation infrastructure in general, as well as national defence and foriegn policy in general are good applications of public money for public goods. > [@](#): > > “Growing the government” is not necessarily bad for the economy because it does not necessarily **detract** from economic activity in the private sector. When the government hands out welfare checks and food stamps – with what kind of private business is it competing? What private-sector activity is it displacing? None. Any activity or business which could have used that money as investment was displaced. Hardly none. > [@](#): > > When your property is taxed to support a public library, what private library is it putting out of business? LOL, ok, I’ll add libraries to my list. > [@](#): > > […]but whatever you call it, neither a large public-service sector nor a generous welfare state require that the state directly own or manage any farms or factories. No, but the welfare state requires a diverting of large amounts of money from those who earn it to those who do not. > [@](#): > > Most of the basic wealth-production activities remain in private hands. Some conservatives seem to regard the percentage of a nation’s GDP that is in the government sphere as a measure of its economic health – assuming that the lower that percentage is, the healthier the economy is. I don’t think I have made this assertion. I hope not. I have made statements to the effect that more private ownership of GDP means more capacity for the sorts of growth that private enterprise is valued for. But I hope I have not given the impression that this alone is any sort of measure of the “health” of an economy. > [@](#): > > And there is no good reason to believe that, other than the example of the economic failure of societies where that figure was at or near 100%, as in the Soviet Union. I hope you can see the fallacy of that kind of straight-line extrapolation. Of course. As long as you see the validity of suggesting that getting closer to that is a concern. > [@](#): > > Or perhaps by “growing the government” you do not mean the government’s share of the GDP, but the degree and the intrusiveness of government oversight of the private sector. No, I was not talking about this. This is another subject altogether. > [@](#): > > And here, I suppose, we’ll never agree; but I believe fervently that capitalism is a socially dysfunctional and destructive system unless it is closely regulated, and that in some cases regulation is worthwhile even if it diminishes bottom-line productivity. No, we will never agree on this point. > [@](#): > > A given factory might be able to produce its goods at a much lower per-unit cost if it were allowed to pay its workers 30 cents an hour and dump its waste products straight into the nearest river – but can you imagine what would be the long-term social and environmental effects of that? (You don’t have to imagine, just looke at any Nike plant in Malaysia.) Perhaps, and a given government might be able to legislate economic activities to the betterment of everyone. But I think this is rarer than you may be willing to admit. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [October 3, 2004, 11:30pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/27 "2004-10-03T23:30:03Z")
> [@pervert](#): > > As I said, not spending cuts as you and I would measure them, but many program participants felt they were being cut. Exactly. At the beginning this happened. At the end I’m not sure, but the programs certainly did not grow relative to revenue growth. > [@](#): > > I would differ slightly from your assessment in that I do not give Clinton era policies that much credit for the economic growth during that period. The fact of teh matter is that Federal spending is only about 20% of GDP in total (states sometimes get credit for another 20%). This is spread throughout so many programs it is difficult to call it either stimulous or infrasturcture investment. It seems much more likely that if anyleveraging occured it was the leveraging of the other 60% of GDP. The stimulus was not from spending, but from having a rational budget for the first time in years. (And the Republicans deserve some credit for this also.) An actual attempt to get the budget under control, and not stupid tricks like balanced budget amendments full of holes, did cause an increase in investment which is what the economy needed. Lots of other things, like the Internet and the sub-$1000 PC, built demand, so it was a collection of things. But Clinton deserves some credit also. There is also the factor of the several crises that happened during the boom, all of which they maneuvered through. They deserve credit for that also. > [@](#): > > Finally, I strongly disagree with your assessment that further government funding of health care coverage will result in a net increase of the economy. We already provide quite a bit of health care directly from the federal and state governments. The programs are very close to being in deficit. The projected “unfunded liability” represented by this in a few years is actually unmeasurable. It is just as likely that the medical costs we already have will bankrupt us as not. Simply adding more to that expense in not the way to address our health care problems. First, the actual amount spent on health care is not going to change much - except perhaps in making care available to those who do not have it now. What this policy should do, by increasing employment and improving efficiency, is to move some of the cost now supported by the state into private hands, while of course moving some back into government hands. Don’t you think the cost of health care would decrease without the insurance overhead? I’m sure your doctor has one or several people just doing insurance work. The real point is that getting more people employed with insurance will add more revenues than the program will cost, so you can’t just look at health expenditures in evaluating it. Anyhow, I haven’t studied this enough to be 100% for it, but just offered it as an example of leverage. ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [October 3, 2004, 11:53pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/28 "2004-10-03T23:53:30Z")
> [@Voyager](#): > > But Clinton deserves some credit also. I hope I did not give the impression I disagreed with this assertion. If I did, I did not mean to. I think that economic factors beyond Clinton’s (or Bush’s) control lead to the boom and recession they each faced. But I did not mean to say that they were blameless altogether. > [@](#): > > First, the actual amount spent on health care is not going to change much - except perhaps in making care available to those who do not have it now. I’m sorry, this seems ridiculous on the face of it. Making something free will inevitably increase demand for it. Consider that many sorts of care are not accessed now because people do not want to see a doctor for little ailments. If the care were free, why should they postpone such visits. Consider also, that some tests and procedures are chosen over others because of costs. Remove the patient and doctor from considering costs and this will increase their use as well. Finally, even if we assume that very few new patients or procedures are caused by this policy. The costs of medical care are increasing at an ever alarming rate. Spending will go up with or without this sort of policy. You will simply shift those costs from the people who could do something about it to those who cannot. A sure way to exacerbate this part of the problem if I ever heard one. > [@](#): > > What this policy should do, by increasing employment and improving efficiency, is to move some of the cost now supported by the state into private hands, while of course moving some back into government hands. Don’t you think the cost of health care would decrease without the insurance overhead? Not really. There would be a moving around of funds, but the overall costs would not be that different. I’ll admit that consolidating the various forms and processes would reduce costs. But I think these costs are not the large percentage of health care cost increases you seem to. > [@](#): > > I’m sure your doctor has one or several people just doing insurance work. Yes, and several of them fill out government forms. I knew a person once who used to teach classes on how doctors should fill out medicare and medicaid forms in order to get paid for the procedures they performed. Don’t kid yourself that these process are streamlined while the insurance industry is a mess. It just isn’t so. > [@](#): > > The real point is that getting more people employed with insurance will add more revenues than the program will cost, so you can’t just look at health expenditures in evaluating it. Right, but I think that is a mistaken point. Everything will have costs. If you add 20-30% more people to the rolls of the insured, and only save the insurance industry 5-7% on their costs, I really don’t think there is much justification for saying that you will save more money than the program costs. > [@](#): > > Anyhow, I haven’t studied this enough to be 100% for it, but just offered it as an example of leverage. Fair enough. ---
**Author:** ![Aeschines](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aeschines/32/16251_2.png) [@Aeschines](https://boards.straightdope.com/u/Aeschines)\ **Post date:** [October 4, 2004, 1:35am UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/29 "2004-10-04T01:35:46Z")
We need national health insurance. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [October 4, 2004, 1:54am UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/30 "2004-10-04T01:54:23Z")
> [@Aeschines](#): > > We need national health insurance. I agree, but how do you propose we pay for it? That’s what this thread is about, really – if Kerry reverses Bush’s tax policies, if he increases upper-bracket taxes to increase revenue\*, will that stifle economic growth or not? \*(And a tax hike **will,** at any rate, increase revenue. Please **don’t** waste our time with any bullshit about the laughable “Laffer Curve,” **pervert!** ) ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [October 4, 2004, 3:37am UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/31 "2004-10-04T03:37:29Z")
> [@BrainGlutton](#): > > I\*(And a tax hike **will,** at any rate, increase revenue. Please **don’t** waste our time with any bullshit about the laughable “Laffer Curve,” **pervert!** ) Come now. I have been known to advocate responsible tax policies (from my perspective anyway). But as far as I know, I have not ever said that all tax increases decrease revenue. Clearly a small tax increase can increase revenue. Surely you, on the other hand, are not claiming that any and all tax increases will increase revenue, are you? > [@Aeschines](#): > > We need national health insurance. Why, exactly. I know that we have a large number of people without health insurance. Did you know that significant percentages of those people are without health insurance simply because they have not signed up? There are those rich enough to afford it who simply don’t have it, there are those too poor to afford it but who qualify for the assistance programs currently available and who, again, have not signed up. Then there are those who are indeed uninsurable under the current system. IIRC they amount to around 20 million or so (This is a very rough guess from some numbers I am remembering from several other threads). As a percentage of the population this is not the disaster we might think. 1st of all, no one is turned away from a hospital because they cannot pay if they have a life threatening illness or injury. What I am asking (and once again, **BrainGlutton** I am willing to drop it in here if it is a hijack) is why the automatic suggestion that the government has to take over funding of medical insurance for this problem. Don’t get me wrong. I am not trying to denegrate the suffering of anyone without access to medical care. But why not explore ways to expand current progrms? Why not explore ways to increase the supply of medical care? Why not explore ways to provide cheaper medical care?\* Why the rush to take over the medical industry completely. The government already controls most of it. Why is that not enough? \*By this one, I do not mean simply passing the costs on to others. I mean actually changing things so that some types of medical care is cheaper to provide. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [October 4, 2004, 4:12am UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/32 "2004-10-04T04:12:33Z")
> [@pervert](#): > > Come now. I have been known to advocate responsible tax policies (from my perspective anyway). But as far as I know, I have not ever said that all tax increases decrease revenue. Not that I recall, no. But you seem usually to argue from the economic-libertarian, “supply-side” perspective, and the Laffer Curve is a hoary chestnut of that school of economics. I can’t put my hands on it right now, but I recall that Martin Gardner noted in his classic _Whys of a Philosophical Scrivener_ that “nobody knows what a Laffer Curve is supposed to look like.” That is, no economist have every actually mapped it out with figures to back it up. It is simply a vague illustration of a general theory that increasing taxes, beyond a certain point, decreases tax revenue by stifling the economic activity being taxed. > [@](#): > > Surely you, on the other hand, are not claiming that any and all tax increases will increase revenue, are you? Why not? Bear in mind that whatever government takes **out** of the private-sector economy by taxation, it always pumps back **in,** by one route or another. Why should that stifle economic activity in general terms? ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [October 4, 2004, 4:23am UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/33 "2004-10-04T04:23:09Z")
> [@BrainGlutton](#): > > Why not? Bear in mind that whatever government takes **out** of the private-sector economy by taxation, it always pumps back **in,** by one route or another. Why should that stifle economic activity in general terms? Well, lets re examine your rule about not applying linear estimation too generously, shall we? Are you actually claiming that a 100% tax rate would _not_ affect the economy? Surely not. I am misunderstanding you. To be fair, the ideas behind the laffer curve are older than Laffer. Take a look at teh wikipedia article and notice the links at the bottom. ---
**Author:** ![Aeschines](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/aeschines/32/16251_2.png) [@Aeschines](https://boards.straightdope.com/u/Aeschines)\ **Post date:** [October 4, 2004, 9:22am UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/34 "2004-10-04T09:22:16Z")
When I last worked in the drug industry (2001), the stat I saw on how much of the medical insurance the govt. provided was 44%. That included Medicare, Medicaid, Veterans’ benefits, etc. With the people off the rolls, typically said to be 45M or so, that means that private insurance covers a minority of the population. It is a sad crazy quilt of a system, fraught with problems in each of its “squares.” For example, we’ve all heard the stories of people _not quite poor enough_ for Medicaid who had to become just a little poorer in order to “afford” it. My mom is freaking out because she had to quit her job because of increasing pain and disability, yet is not yet eligible for Medicare (is not yet 65). She’s fighting an uphill battle trying to convince the SSA that she is disabled. My wife and I have to get private insurance. I am a freelance writer right now and get no corporate health insurance, obviously. We’re going to have to get a high deductable Blue Cross plan, which is barely different than having no insurance at all. It will cover basic office visits (copay of $25) and will be useful if something catastrophic happens. Knock on mahogony. It’s time to put all these health insurance companys, HMOs, and other inefficient, unprofitable organizations out of their misery. And the American people have had enough, too, of dealing with this maze of health care “providers.” We pay for by going to a one-payer systems like most of the civilized world has and completely reforming the tax system. A complete overhaul. No, I don’t have the numbers. I doubt that even very many people in Washington have the numbers. Do we ever hear the pols talk in specifics, with numbers? No. But we _do know_ that France and Germany have built truly excellent medical programs. Heck, even Cuba is said to have great medical care. Japan’s is pretty good too, as I can attest. I’m sick of hearing the same crap about the Canadanian and British systems (not that I necessary accept the right-wing interpretations of those systems either), that we can’t, with our American ingenuity, build a truly excellent system for our people. We need a tax revolution in this country. As they about closing sales, “Everything’s gotta go!” \*Payroll taxes–regressive. Gone! \*Sales taxes–regressive. Gone! \*Property taxes–unfair. Gone! \*Crazy quilt of import tariffs–inefficient. Replaced with a single tariff except for those related to industries we truly want to protect. \*Progressive income taxes–fair. Stay! And soak the rich, of course. \*Sin taxes–fair. Stay! \*Etc. etc. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [October 4, 2004, 2:33pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/35 "2004-10-04T14:33:18Z")
> [@Aeschines](#): > > \*Payroll taxes–regressive. Gone! “Payroll taxes” could be read to mean everything deducted from your paycheck. I assume you mean only the deduction for the regressive Social Security tax, and not the progressive income tax deduction? ---
**Author:** ![jshore](https://avatars.discourse-cdn.com/v4/letter/j/b5e925/32.png) [@jshore](https://boards.straightdope.com/u/jshore)\ **Post date:** [October 5, 2004, 2:25am UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/36 "2004-10-05T02:25:14Z")
> [@BrainGlutton](#): > > “Payroll taxes” could be read to mean everything deducted from your paycheck. I assume you mean only the deduction for the regressive Social Security tax, and not the progressive income tax deduction? The term “payroll taxes” is conventionally used to refer to the social security and Medicare taxes…These are taxes that fall specifically and only on wage income. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [October 5, 2004, 3:55pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/37 "2004-10-05T15:55:18Z")
Let’s get this back on track. This has been an intellectually stimulating thread, but we still haven’t answered the OP: In **retrospect,** just looking back over the past couple of years, what **has** been the economic effect of Bush’s tax cuts? Bush credits the cuts with stimulating the economy. Have they? ---
**Author:** ![pervert](https://avatars.discourse-cdn.com/v4/letter/p/bbe5ce/32.png) [@pervert](https://boards.straightdope.com/u/pervert)\ **Post date:** [October 5, 2004, 4:12pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/38 "2004-10-05T16:12:10Z")
Yes. But only in a limited fashion. There are good arguments that other more productive uses could have been found for the tax cut money. Personally, I am skeptical in the extreme that they would have been put to any use except the creation of entirely new programs. But that is not the question in this thread. IF you look at the amount of money the tax cuts represent as a percentage of GDP, they could not have had much of an effect at all. IMO tax cuts or expenditures are not very good ways to stimulate an economy. I do acknowledge, however, that they can have such effects. ---
**Author:** ![Chefguy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chefguy/32/138_2.png) [@Chefguy](https://boards.straightdope.com/u/Chefguy)\ **Post date:** [October 5, 2004, 5:05pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/39 "2004-10-05T17:05:54Z")
In simplistic terms: Dow Jones Average, December 1999: 11,400 Dow Jones Average, Today: 10,209 Granted, the average today is way up compared to, say, December of 2002, when it was at about 8400. But there has essentially been (without arguing about who caused it) a net loss under this administration to this point. If you were not savvy enough to buy and sell at the proper times, your net gain over the past four years has probably been negligible. I don’t see where the tax cuts have done anything to spark the economy in a meaningful way. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [October 5, 2004, 5:09pm UTC](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277/40 "2004-10-05T17:09:51Z")
> [@Chefguy](#): > > In simplistic terms: > > Dow Jones Average, December 1999: 11,400 > Dow Jones Average, Today: 10,209 > > Granted, the average today is way up compared to, say, December of 2002, when it was at about 8400. But there has essentially been (without arguing about who caused it) a net loss under this administration to this point. If you were not savvy enough to buy and sell at the proper times, your net gain over the past four years has probably been negligible. I don’t see where the tax cuts have done anything to spark the economy in a meaningful way. Errmmm . . . OK, I tried starting a GD thread on this very question but nobody bit . . . Look, just how relevant **is** the DJA as a measure of the general health of the economy? I mean, those aspects of the economy that directly affect the daily lives of people who have **nothing invested in the securities markets** – unemployment rates, income levels, inflation, etc. I honestly don’t know, but I would hesitate to simply assume (as Pubbies often do) that a thriving Wall Street and a thriving national economy are one and the same. [Previous page](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277.md?page=1) [Next page](https://boards.straightdope.com/t/what-has-been-the-economic-effect-of-bushs-tax-cuts/267277.md?page=3)