8/1/01 - "Dems argue Bush's tax cut will sow seeds for return of Gov red ink."

[Clio the Leo]

Found a very interesting article tonight (this morning?) that knocks a big hole in theory that Bush's tax cut would not have harmed the economy if 9/11 had never happened.

The problem? The Gov. was ALREADY having to borrow money to pay for Bush's tax rebates by AUGUST of 2001.

This is a scan of an article from the time so cant copy/paste it here, but it's def worth a read...

http://news.google.com/newspapers?id=LoIfAAAAIBAJ&sjid=qn8EAAAAIBAJ&pg=4325,998842&dq=bush+tax+cut+borrow&hl=en">"US to Borrow Billions to Cover Tax Refund Checks."

..... we tried to warn them! (share with your friends!)

[The_Casual_Observer]

1. He was put in office to get that tax cut, start some wars & screw up

social security. 2 out of 3 ain't too bad for a nitwit.

[Enthusiast]

2. I agree.

They did not steal the election with good intentions in mind.

[pacalo]

4. Yes, but he sure tried with that traveling snake oil act with the fancy-dancy banners.

And, after they lost top billing status, it dawned on them to use the angry nutbags collectively as a stand-in for the medicine show. The teabaggers were born. And here we are, with Michele Bachman running for president.

[unblock]

3. yeah, but since when is being correct politically useful?

[Igel]

5. Of course.

The entire budget projections were based on crappy projections and, had they been printed on toilet paper with non-smudge ink might have been useful as toilet paper.

Many still find them useful for some purposes, mostly by assuming they're were good as gold.

The tax cuts made the same assumption: That they were good. The (D) had to assume the projections were good at times and bad at others. The reason they were bad is that they projected another 10 years with no recession, even though the leading indicators had already strongly suggested recession and, well, we'd already had a record post-WWII run of growth with no recession.

It made for some ticklish argumentation. (R), who argued the projections were crappy, had to say they were good after all when it came to justifying tax cuts. (D), who argued the projections were great, had to say, "Not so fast, maybe they're not." The veritable gushing geysers of hypocrisy were stupendous to behold.

In any event, the recession talked about from 8/00 or before hit in 2/01. Then we had tax cuts (with more rounds of tax cuts later). And then a tax rebate, which was "stimulus" for the recession.

This, of course, leads to the same kind of ticklish argumentation as before. Stimulus is good and great, except when it isn't. $800 billion with $125 billion in tax cuts is a good thing. But 10 years ago a smaller stimulus was a horrible thing. Some of the excuses were that instead of tax cuts sent out it should have been in smaller amounts; or instead of giving money to people the government should have given money to different people; or just paid for and hired additional people. Whatever. We've heard the arguments over and over, including in 2/08 before *that* small-yet-budget-busting stimulus package. You pick your economic theory and you get what you set out to get.