When discussing revenue growth since the enactment of the tax cuts, Administration officials typically focus only on revenue growth since 2004. This provides a convenient starting point for their arguments, as it sets a very low bar. In 2001, 2002, and 2003, revenues fell in nominal terms without adjusting for inflation for three straight years, the first time this has occurred since before World War II. Measured as a share of the economy, revenues in 2004 were at their lowest level since 1959. Given this historically low starting point, it is not surprising that revenues have recovered since then. Supporters of the tax cuts selectively cite revenue growth over just the past three years to ...view middle of the document...
In the second quarter of 2008, when most of the rebate checks were sent out, consumer spending rose at an inflation adjusted annual rate of 1.2 percent, not much above the 0.9 percent rise in the first quarter. The one bright spot was that the number of people making $100,000 to $200,000 grew significantly between 2007 and 2008. Their ranks increased by 393,465, or 3 percent, to more than 13.8 million taxpayers.
In 2008 the average Incomes fell well below 2000 level, we had more taxpayers but less revenue. In 2007 we had fewer Jobs and less money. In 2008we had even fewer jobs and lower pay. The one bright spot was that the number of people making $100,000 to $200,000 grew significantly between 2007 and 2008. Their ranks increased by 393,465, or 3 percent, to more than 13.8 million taxpayers.
This truly is good news, because most of the increase had to be people who worked their way up into six-figure incomes from 2007 to 2008. But despite that one sliver of good news, the Republican sponsored tax cuts damaged our nation.
Now, the Democrats are in power. In his first term, President Obama outlined his economic policies in the 2008 Presidential election campaign. Once elected, he named former Federal Reserve Chairman Paul Volcker, who advocated tougher financial restrictions, to head his Economic Advisory Panel. He then launched the $787 billion Economic Stimulus Package, which returned the economy to positive GDP growth by the third quarter 2009.
The next year, Obama pushed through the Health Care Reform Act, with the goal of lowering health care costs. He also supported passage of the Dodd-Frank Bank Reform Act, which was designed to make another financial crisis less likely. It regulated non-bank financial companies, like hedge funds, and the most complicated derivatives, like credit default swaps. It included the Consumer Financial Protection Agency, which consolidated protection for consumers with credit and debit cards, consumer and payday loans, and credit reporting agencies, and regulates credit and mortgage fees. He hasn't yet fulfilled his campaign promise to review all trade agreements to make sure they didn't cause job losses. However, he did support passage of these agreements as part of the American Jobs Act. More important, this Act sought to stimulate economic growth to create jobs. This Act was in response to unemployment that remained stuck at 9.1%. Obama and Bush Both Created Huge Budget Deficits.
The fact is that both Presidents ran up record setting budget deficits. Obama's fiscal year 2012 Budget proposed a $1.07 trillion deficit, even though the recession was over. The fiscal year 2011 budget deficit was $1.3 trillion, but was delayed by the Republican House until a mere $38 billion was trimmed in March 2011. Obama's first budget in fiscal year 2010 ran the highest deficit ever almost $1.6 trillion. After Obama was elected, he also added part of the Economic Stimulus Plan. Although it was to be...