BCT Editorial – 5/30/06

This page was last updated on May 30, 2006.

Party on; Editorial; Beaver County Times; May 30, 2006.

Below is a detailed critique of the subject editorial.

“When President Bush signed legislation that extended his tax cuts, he suggested they were responsible for the surge of new revenue into the Treasury.

“But all he and the GOP-controlled Congress really did was pile $70 billion more in debt on future generations of Americans.

“Knight Ridder Newspapers reported that Bush’s assertion that his tax cuts ‘means more tax revenue’ is just not true. ‘A host of studies, some of them written by economists who served in the Bush administration, have concluded that tax reductions mean less money for the Treasury,’ it reported.

“The reasons for the surge in revenue were the same as in the ‘90s - the population and the economy both grew. That information came from Douglas Holtz-Eakin, who was the chief economist for Bush’s Council of Economic Advisers in 2001 and 2002 and the nonpartisan Congressional Budget Office until last year.

“The news service even managed to get Treasury Secretary John Snow to concede that tax cuts don’t pay for themselves.

“The problem with this administration and, unfortunately, far too many Americans is that they think the party never ends.”

[RWC] “The reasons for the surge in revenue were the same as in the ‘90s - the population and the economy both grew.” Duh! And what exactly prompted the economy to grow given that President Bush inherited a recession?

The problem with the studies cited above is they appear to assume we would have had exactly the same economic growth without the tax cuts. If you assume tax cuts have absolutely no effect on the economy, of course you conclude, “Tax cuts don’t pay for themselves.”