Sunday, June 26, 2005

Tax Revenue is Up, Unemployment is down, and the Economy is Expanding, so Why aren't we Hearing about it?

It was one of the major domestic policy issues of the 2004 elections, wasn't it? Social Security reform was an election issue, too, but making the 2001 & 2003 tax cuts permanent was a major campaign issue while Social Security was not. (Social Security was more of an issue in 2000 that got sidetracked due to more important things like psycho mass murdering islamofascist goat molesters flying jets into skyscrapers and two resultant wars.) Kerry you may recall had said that he believed the tax cuts were irresponsible and would have them repealed if elected president. Well, Bush won the election, and despite the nearly constant negativism we've been bombarded with from the media and politicians on the left, the economy is doing quite nicely thank you very much, so is this issue going to come up or are the 2003 tax cuts going to be allowed to expire? I'm just wondering because it is starting to look like John Kerry won the '04 election the way people are behaving in Washington, you know with Bolton's nomination to the UN blocked, the military being compared to Nazis, with the Republicans in the Senate pretty much checking with the Democrats before they do anything to make sure its ok with them, and the five liberal SCOTUS justices deciding to give municipalities the power to seize private property and give it to whoever has political pull. I'm starting to wonder if the Republicans can do much of anything with their 55-45 majority in the Senate.

For some perspective on the tax cut issue, see William Kristol 's article in this week's Weekly Standard:
The 2003 cuts in personal income rates, and in the tax rates on dividends and capital gains, have helped produce economic growth of better than 4 percent a year--as non-tax-cutting European economies have stagnated. Unemployment here is down to 5.1 percent, while it remains 10 percent or more in Germany and France. The Dow is up by about 24 percent since May 2003, and capital spending by business is up some 22 percent.

And tax revenues are up. As Stephen Moore has pointed out in the Wall Street Journal, the supply-side Laffer curve has worked. Federal tax receipts are up by over 15 percent so far this fiscal year--and state tax receipts are up 7.5 percent. Individual and corporate receipts are up some 30 percent in the two years since the tax cut. The budget deficit looks as if it will be down by some $60 billion this year.

It's a Bush administration success story. They should tout it. Usually politicians seek to forget--and to have others forget--their failures. In this case, the Bush administration has forgotten to take credit for its successes.
In case you're wondering about that "Laffer" curve, if you're to the right of the hump (as we were, evidently) then a decrease in tax rates results in more tax revenue due to increased spending, investment, productivity, etc. Ha ha what a laugher! But you know what? Bush won't tout it. Why bother? Bush can't get good press no matter what. Not from the MSM. The media will just laugh at him - they've invested to much to stop now. They'll say that up is down and the economy sucks and that all the suffering in the world is Bush's fault just like they always do. They'll do their little mind control thing and get the public to think the tax cut was bad just like they got people to think that social security is fine the way it is and owning a piece of your own retirement account instead of trusting the gummint is dangerous. Bush is getting sick of fighting CNN,NYT,ABC,CBS,NBC,PBS,NPR,etc. (though Karl Rove seems to be warming up to the task). I suspect W.'ll wait until after the 'o6 elections before making a push for the Senate to vote to make the tax cuts permanent. In the '06 midterm elections the Republicans will most likely pick up more seats in both houses. It might not yet be enough to defeat a filibuster unless the Demonrats in the Senate continue their suicide strategy of lockstep obstructionism (because if they do, they will most likely lose the five seats the republicans need to reach 60, i.e., no more filibusters), but Bush can't take the chance of letting the current Senate screw up a perfectly good economic recovery.

I think this recent court case in particular is bad for the Dems, particularly since they've made such a stink about blocking judicial nominees who defend the Constitution and its founding principles. Those on the right have made a lot of noise about it and those on the left have not, or if they have then their response has been a whisper compared to their outrage over comments critical of liberals made by Karl Rove, but I don't think the lefties like it either since big business benefits from the Supreme Court decision. (I should stress here that, though some businesses with political pull will benefit from this, capitalists in general are livid because without individual property rights, capitalism ceases to exist. Any 16-year old could tell you that.) The only people who are happy about that case decision are communists who believe in central planning and think that property rights for individuals are inherently wrong. Which raises an interesting question: are John Paul Stevens, Anthony Kennedy, David Souter, Ruth Bader Ginsburg and Stephen Breyer communists? This case also raises an interesting question for these United States as a whole: can a nation survive when the principles which serve as the basis for its formation are discarded?


Blogger Jibtrim said...


I can answer your question in three simple words...Main Stream Media.


8:28 PM  

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