Friday, December 4, 2009

GOP Economics, Explained

Special to Steve Benen (he's way confused).

Just repeat:

All economic growth is a direct result of tax cuts; all recessions are caused by tax increases.

All economic growth is a direct result of tax cuts. Thus the recovery from the 1981-1982 recession was a result of tax cuts passed in 1981, the recovery from the 1990 recession was a result of tax cuts passed in 1981, and the 1990s boom was caused by low tax rates from the 1981 tax cuts. The recovery from the 2001 recession was caused by the 2001 tax cuts and the anticipated 2003 tax cuts. The current recovery, if it happens, will also be a result of the Bush era tax cuts.

All recessions are caused by tax increases. The 1990 recession was caused by the anticipated effects of the 1990 and 1993 tax increases. The 2001 recession was actually an exception; it was caused by anticipated effects of the 9/11 attacks (although it is possible that it was caused by the 1993 tax increases). The current recession, of course, was caused by the anticipated effects of tax increases forced through by the Obama administration.

You may ask: how could the 1990 and 1993 tax increases have caused the 1990 recession, which occurred before those bills passed (not to mention before they took effect)? How could the tax increases after January 2009, which actually turned out to be tax cuts, have caused a recession that began in December 2007? Good questions! The answer is obvious: All economic growth is a direct result of tax cuts; all recessions are caused by tax increases.

You may ask: if anticipated tax increases -- even ones that never showed up -- caused the 1990 and 2007 recessions, then why didn't the anticipated tax cuts prevent the recession that began in spring 2001? Good questions! Answers: All economic growth is a direct result of tax cuts; all recessions are caused by tax increases. Also, 9/11!

You may ask: didn't Ronald Reagan enact tax increases in 1982 and 1983? Why didn't that derail the 1980s recovery? For that matter, didn't Obama cut taxes this year? Answers: Shut up. All economic growth is a direct result of tax cuts; all recessions are caused by tax increases.

HTH.

2 comments:

  1. This clears up a lot. Thanks.

    Assuming economic growth begins in earnest next year, what will be the cause of that? Obama's tax cuts? Or Bush's back in '03?

    ReplyDelete
  2. Seth,
    Those will be caused by anticipation of the Palin/Beck cuts in 20HellFreezesOver.

    ReplyDelete

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