Were the Bush Tax Cuts a Good Thing?

[Epee_Pox]

I read this today, and didn't know what to think of it. Discuss.

Here's the new liberal standard line in the budget debate. George Bush inherited large surpluses from Bill Clinton and squandered them on tax cuts for the rich.

That's always been an odd formulation since tax revenues are on a tear over the past three years. But a new analysis from federal budget expert Hazen Marshall, former majority staff director for the Senate Budget Committee, exposes further the fallacy of the argument. Mr. Marshall examined the 2001-2006 budget window projections that were made before the Bush tax cuts were enacted. Now mind you, these are projections issued in early 2001 before 9/11 and before the recession. What the analysis shows is that only 30% of the increase in the budget deficit was a result of the tax cuts. The rest was due to changes in the economy and budget spending increases.

That's right. Spending increases -- by both parties in Congress -- account for a larger share of the fiscal deterioration than tax cuts.

The latest data from the Congressional Budget Office shows that federal receipts are up just short of $750 billion in three years. The deficit will fall to 1.1% of GDP next year, which is less than half the post-World War II average.

The CBO does envision "daunting" deficit spending in the years after 2012. Why? Because of runaway entitlement spending. But those Democrats who scream loudest about this coming debt are also the ones leading the fight to expand an existing children's health entitlement, which would add in its first decade $132.6 billion to those long term unpaid bills. And these people call themselves "deficit hawks."

[chefencer]

I agree that the deficit is from spending increases, but summing 6 years of budget priorities into 'Spending increases -- by both parties in Congress' is a little too simplified for my tastes. Yes, democracy is about compromise, but the responsibility for the spending is really upon those who set the priorities...
That's how people who add 133 billion to the budget Can call themselves deficit hawks - it's all relative. Perhaps we should put the SChIP outside the budget as a special emergency appropriation...
There are no heroes here.

[jessicasimpson]

No national leader (president, prime minister, king, dictator, overlord, ect.) has ever lowered taxes at war time in the history of civilization. Eccept Bush, who has done it twice.

[keith]

I seem to remember about 20% of the US budget being non-entitlement. Might be wrong.

Anyway given that the issue is entitlement spending (and the military) it is perhaps surprising that neither party seems to keen to rein that in.

Mind you given the stimulatory effect of tax cuts perhaps a 0% tax rate is just what the nation needs.

[jessicasimpson]

Mind you given the stimulatory effect of tax cuts perhaps a 0% tax rate is just what the nation needs.

I know the theory of stimulatory tax cuts at the top, but it still makes no sence to me. When has a tax cut at the top ever worked to stimulate the economy?

[Inquartata]

No national leader (president, prime minister, king, dictator, overlord, ect.) has ever lowered taxes at war time in the history of civilization. Eccept Bush, who has done it twice.

A) I am sure you can cite evidence establishing the former.

B) We are not at war, inasmuch as Congress has made to declaration to that effect.

C) The first of the tax cuts was signed into law in June of 2001, before 911 and well before the war ( or "war" ).