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To: TLBSHOW
I have said that Republicans are spending right along with Democrats, and that the president has gone along with them. I have demanded to know how in the world $50 billion in tax cuts so far equals a $400 billion deficit, yet spending $2.3 trillion somehow has no role in it - especially when tax cuts increase revenue. (See: dynamic scoring)

Rush should know that they're doing dynamic scoring now, but unfortunately it doesn't show that tax cuts would increase revenue. Both the Congressional Budget Office and the Joint Committee on Taxation have done macroeconomic analyses of the proposed tax cut, and not one of the many economic models they use shows that the tax cut would result in increased revenues. All show some positive macroeconomic feedback, but all conclude that the tax cut loses revenue over time.

If you dig through Cato's website you will find a piece from the mid- to late-1980s by William Niskanen and Stephen Moore (no less!) that acknowledges that the 1981 tax cut did not increase revenues to the federal government. Also, check out Bruce Bartlett's archive on townhall.com for his December 31, 2002 column on the same mythology.

36 posted on 05/22/2003 1:49:49 AM PDT by mdwakeup
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To: mdwakeup
Rush should know that they're doing dynamic scoring now, but unfortunately it doesn't show that tax cuts would increase revenue.

At least three Reagan economists wrote books on the Reagan economic program, and all denied that revenues to the Treasury increased due to the rate cuts. The point of the rate cuts was to stimulate economic growth, and the Reagan economists had predicted that the resulting economic growth would recoup a portion of what would be lost to the Treasury with lower rates. Lawrence Lindsey's study found the amount recouped to be fully two-thirds of the loss predicted by static analysis, so the actual reduction to the Treasury amounted to but a third of the amount predicted by static analysis. But a loss there was, which is why Reagan asked Congress for offsetting spending cuts. Only capital gains cuts resulted in an actual increase of revenue by the Treasury.

40 posted on 05/29/2003 11:52:35 PM PDT by Pelham
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