CBO Report 2005: In the absence of the Bush Tax Cuts the nation would be returning to a surplus in 2011

[scandal 951]

LI, I chose "It is unknown".

There is ongoing debate amongst economists about what the maximal point on the Laffer curve is, at which threshold revenues are at their greatest.

If that is true then how can the Bush Tax Cuts be "the single largest contributing factor to the deficit"? From what I have gathered it is fact that they were a failure. And it is fact that they catered to the rich. That is not up for debate (or so I thought).

Now if mawilson or anyone else wants to answer...How can adding $7 trillion in deficits (09-19) be good for our economy....The country is fvcked, the middle and lower class is fvcked, and the top 20% (especially top 1%) are going to get even richer all the way down to our demise!

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I don't think there is a contradiction between what I wrote and your response. I think it's possible for both to be true. Namely, I was responding to the first question in your poll, which was a very general question of "do lower taxes result in higher government revenues"? In your comment above, you are discussing a specific historical case: the Bush tax cuts during the past decade.

My point is that in the general case, the answer is not obvious. If current taxes are punitively high (> maximum on Laffer Curve), then reducing them should lead to more revenue. What's not known is what is that maximal point, or even is there a unique and unchanging maximal point (probably not).

Your response is that seen in hindsight, the Bush cuts lowered Clinton-era rates which we can now see (20/20 hindsight) were < maximal on any Laffer curve, and consequently we lost out on a huge amount of revenue that was not collected during that decade. I fully agree with you: those specific cuts, made at that specific time, from that specific set of initial rates, were very unwise and destroyed our public finances.

None of that changes that the answer to your first poll question is unknown, in the general case. To sum up, not all tax cuts are bad, but the Bush 2001/2003 ones certainly were.

[dalegg 143]

= I fully agree with you: those specific cuts, made at that specific time, from that specific set of initial rates, were very unwise and destroyed our public finances.

Or maybe it was very unwise to go to Iraq and start a 600 billion dollar prescription drug plan while those cuts were in affect.

[scandal 951]

Or and maybe it was very unwise to go to Iraq and start a 600 billion dollar prescription drug plan while those cuts were in affect.

Who said it has to be 'or', when 'and' will work just as well?

[dalegg 143]

Who said it has to be 'or', when 'and' will work just as well?

Because there wouldn't have been those large deficits without the additional spending. Then all is well. Balanced budget and more money in everyone's pockets.

[scandal 951]

Because there wouldn't have been those large deficits without the additional spending. Then all is well. Balanced budget and more money in everyone's pockets.

I won't bother responding seriously. LI has posted enough charts in this thread and others that prove this wrong. If you insist, I'm sure LI will be happy to oblige you with a few more charts.

[dalegg 143]

I won't bother responding seriously. LI has posted enough charts in this thread and others that prove this wrong. If you insist, I'm sure LI will be happy to oblige you with a few more charts.

No, I'd rather end it with your nice answer there.