Bush's tax cut is a good one

[tw]

Originally posted by Dagnabit
And the biggest difference is that Reagan started out with a country in a modest deficit, and grew that to humongous. Now Bush is starting with a small surplus, and might grow that to a modest deficit. We'll see.

I think he'll get the benefit of an age when a combination of economic growth and the end of the old welfare system put a big dent in the era of entitlement. The social budget will shift from the feds to the states and local communities, as people care less and less about national issues and more and more about children and schools.

Predicted is what you want to believe rather than using history as a guide. Tax cuts always result in a short term economic boom followed by a recession. Use Kennedy's 1961(?) tax cut (an example that Republicans always reference). It resulted four years later in serious economic recession (that part the Republicans forget to tell you about) followed by this nation's worst problems of stagflation.

Today, even Japan is trying to kick start its economy with 'money grenades'. It is not working in Japan either.

The nature of economics. Any attempt to fix an economy using money games always results in inflation, recessions, stagflation, or other nasty events. Greenspan has it correct. Adjust money supply to meet the needs of economic activity - keep the dollar's value constant. Use economic indicators to determine how many dollars are required AND never try to create economic growth - don't try to improve those economic numbers - using money games.

Growth, wealth, and productive economic activity are only created by innovation. Throwing money at an economy (or at a company) does not create innovation AND has a history of sometimes stifling innovation. Thrwoing too much money at a problem has created less growth associated with more debt.

Silly tax cuts can only mean higher interest rates - to compensate for the inflationary effects of the tax cut.

Even moreso, where is this government surplus? A recent CBS radio columnist (Dave Ross last week) noted that the government debt numbers have "increased" from last year. Correct. The surplus is only a projection that has not yet materialized.

When credit cards are maxed out (Regan), and then some unexpected surplus money arrives (1990s), do you go on a spending spree or do you first pay off the credit cards? Responsible people first pay off those high interest debts so that they are richer during all those 10+ years. To not pay off those debts only enriches the creditors - predominately the rich and at the expense of all other classes.

Either that unexpected surplus is invested in the economy to create, at most, a 3% growth rate - or it pays off a 6% and 8% debt on government paper. Bush Jr would have you spend money on a tax cut, hopefully, to create at most a paltry 3% growth. He would have you forget the 8% intestest payments to rich investors. Forget? Yes - that is what you must do to like his tax cut.

Responsible government would first pay off its debts. That means government will have more money to use ten years later AND demands on capital markets would be reduced - ie. lower interest rates. Furthermore, paying down the debit today means that a responsible future federal government can raise cash - ie. sell bonds at resonible rates - should an emergency arise.

Notice politicans told you none of this. The above is really too complex for the average reader of the Daily News. Politicans sell tax cuts as it they were power strip surge protection - just another scam they hope you won't understand.