Bush claims tax cuts have actually increased the amount of revenue that the federal government "takes in" by stimulating the economy. They say more taxes are collected from a bigger economy, in spite of the lower tax rates.
Take a deep breath.
That is quite a complicated concept and it has some truth, but here is a question I ask.
Would this "economic stimulation effect" still happen if the tax cuts were accompanied with equal spending cuts on the part of the federal government?
In other words, of course the economy is stimulated as it's getting a double barreled influx of cash.
Lower taxes, but federal spending remains high.
The economy would really suffer if tax cuts were equaled with big cuts in federal spending. Cuts in entitlements, military spending, highways and infrastructure as well as hurricane relief, for instance. If the tax cuts caused these huge spending cuts, then the economy would not be doing so well.
Or, at least I don't think it would be doing well.
Basically the economy is doing well because low interest rates have allowed us to put things on the credit card.
We have low taxes while the federal government continues to dump money into the economy. The federal government can continue to spend money on keeping infrastructure running.
The best of both worlds. That is until the credit card comes due.
Still one might also have to ask, "what else would any president do?" Walk away from hurricane relief?
I never voted for Bush though.
Bringing the troops home from Iraq could save money.
Anyway, our government is spending lots and keeping taxes low. Some say "spending like a drunken sailor," but what other choices does it have?
Will this credit card ever come due?
That's a good question.
Sometimes I wonder. It seems like it's "easy money." Maybe the federal government will eventually declare some form of bankruptcy.
Then what will happen?
Could life just go on with little consequence to the economy?
Life goes on like this is just some sort of "paper shuffling" matter.
Then again maybe not. Who knows.