The Republicans claimed, just as they are doing today in the face of evidence that proves the exact opposite of their assertions, that additional tax cuts will stimulate the economy. It is patently false, but since when has evidence meant anything to ideologues? Here is the meat of the article:*
The 2001 tax cut did nothing to stimulate the economy, yet Republicans pushed for additional tax cuts in 2002, 2003, 2004, 2006 and 2008. The economy continued to languish even as the Treasury hemorrhaged revenue, which fell to 17.5 percent of the gross domestic product in 2008 from 20.6 percent in 2000. Republicans abolished Paygo** in 2002, and spending rose to 20.7 percent of G.D.P. in 2008 from 18.2 percent in 2001.
According to the C.B.O., by the end of the Bush administration, legislated tax cuts reduced revenues and increased the national debt by $1.6 trillion. Slower-than-expected growth further reduced revenues by $1.4 trillion.
However, the Bush tax cuts continued through 2010, well into the Obama administration. These reduced revenues by another $369 billion, adding that much to the debt. Legislated tax cuts enacted by President Obama and Democrats in Congress reduced revenues by an additional $407 billion in 2009 and 2010. Slower growth reduced revenues by a further $1.3 trillion. Contrary to Republican assertions, there were no additional revenues from legislated tax increases. . .
Putting all the numbers in the C.B.O. report together, we see that continuation of tax and budget policies and economic conditions in place at the end of the Clinton administration would have led to a cumulative budget surplus of $5.6 trillion through 2011 – enough to pay off the $5.6 trillion national debt at the end of 2000.
Tax cuts and slower-than-expected growth reduced revenues by $6.1 trillion and spending was $5.6 trillion higher, a turnaround of $11.7 trillion. Of this total, the C.B.O. attributes 72 percent to legislated tax cuts and spending increases, 27 percent to economic and technical factors. Of the latter, 56 percent occurred from 2009 to 2011.The horrendous expenses from the Bush wars would have still pumped up the deficit, of course, but not by nearly as much.
So idiotic results like this are what we can expect if we give the Republicans free rein . . . something that I very much fear is possible in the fall.
*Original source article by Bruce Bartlett in the NY Times is here.
**You will note that Paygo is now Republican orthodoxy. It is only mandatory when the Democrats were in charge. Soon as the GOP was in charge, they ditched it and set about spending without revenue streams to support it.