Tax cuts: a failed policy of the past?
President Barack Obama is presiding over what even CBS News admits is “the worst economic recovery America has ever had.” During this “recovery,” unemployment has been over 8 percent for 43 months in a row. The President has tried to spin his way out of these numbers, recently announcing, “Today we learned that after losing around 800,000 jobs a month when I took office, business once again added jobs for the 30th month in a row, a total of 4.6 million jobs.” While not perfect, he admits, this performance is better than what we can expect to see under President Romney, who wants to return, says Obama, to “the failed policies of the past,” that is, to “the same tax cuts and deregulation agenda that helped get us into this mess in the first place.”
The idea that George W. Bush was some kind of deregulator is easily debunked: as Obama himself admitted, “I have approved fewer regulations in the first three years of my presidency than my Republican predecessor did in his.”
But Bush did indeed cut taxes, most notably in 2003. Did that policy “fail”? How did it’s results compare to Obama’s record?
It’s true that the private sector has added 4.6 million new jobs over the past 30 months. But during the 30 months after the Bush tax cuts went into effect in August 2003, the private sector actually added even more jobs – 5.3 million.
Moreover, the new jobs added under Obama have been lower-paying jobs, reducing real median household income by more than $2,000; the Bush tax cuts, in contrast, enabled the private sector to add more jobs while simultaneously increasing real median median household income.
As a result, under Obama in the last three years, 2.7 million more Americans fell into poverty. In contrast, during the three years following the enactment of the Bush tax cuts, the number of Americans in poverty actually fell.
In addition, during Obama’s first three years, more than 11 million more Americans went on Food Stamps. That’s more than four times as many as were added during the three years following the Bush tax cuts.
When Obama was inaugurated in 2009, he inherited a record budget deficit, due to a substantial drop in revenue from the recession, combined with Bush’s massive TARP spending (which Obama voted for in the Senate). Nevertheless in the four years since then, Obama has managed to decrease this whopping deficit by just 6 percent. In contrast, by increasing revenues, the Bush tax cuts over four years slashed the deficit by 60 percent.
Despite this surge of revenue created by the Bush tax cuts, Bush has been (properly) criticized for failing to control spending, thus increasing the national debt. In the four years after the Bush tax cuts went into effect, Bush (and the GOP Congress) increased the debt by $1.6 trillion. Yet Obama has managed to top him, increasing the debt over a similar period by $4.5 trillion – nearly three times as much as Bush.
By any metric, the Bush tax cuts were more successful than Obama’s policies have been. If anyone is pursuing “failed policies of the past,” it is Mr. Obama, stuck in the Great Society mindset, hurtling pell-mell toward the tax cliff of January 1, 2013.
While President Romney would be well advised to steer clear of the Bush administration’s overspending and over-regulation, one Bush policy he would be wise to adopt is tax cuts.