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To: trane250
During the 8 years of the Bush administration, our treasury debt will increase by at least 4.5 trillion dollars. During the Reagan years, our treasury debt increased by 1.8 trillion 1980's dollars. QED

That is not evidence that the tax rate reductions were not a factor in tax revenue increases. Individuals changed behavior as a result of the tax rate reductions. Individuals worked more, invested more, and changed the pattern of their investment behavior. Static budget models do not account for changes in individual behavior.

I do not question your data about the growth in federal spending. Part of the growth was unavoidable. Spending on the war on terror was necessary. Republicans did not constrain the growth in other parts of the budget although the rats would have spent far higher. A Republican Congress with a rat president may have reduced the growth in federal spending. The tax rate reductions were still a good idea, with a positive impact on economic growth and economic freedom.

The current tax rebates are a different story. The tax rebates are just a gimmick to pump more money into the economy. The rebates will lead a loss in tax revenue and increased borrowing this year. I do not see any long term changes in consumer behavior as a result of the tax rebates. For fiscal responsibility, the tax rebates should have been offset by spending reductions. Spending reductions would have offset the short term effect of the rebates however. If it was not an election year, tax rebates would not have been done.

105 posted on 05/14/2008 8:19:19 PM PDT by businessprofessor
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To: businessprofessor
That is not evidence that the tax rate reductions were not a factor in tax revenue increases.

Allow me to repeat. Tax revenue increased because economic activity increased. Economic activity increased because there was the combined stimulus of more disposable income and more government spending. But the USG borrowed against the future to finance the increased spending. Our debt keeps growing larger. Supply siders argue that the new dynamic will ignite a frenzy of productive activity that will grow the real economy (and thus tax receipts) to such an extent that any debt incurred in the process will be wiped out. It hasn't happened and never will. IMHO "supply side" economics is akin to perpetual motion theories in physics.

106 posted on 05/15/2008 12:00:13 PM PDT by trane250
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