Tag Archives: recession

THE TRUTH ABOUT THE BUSH TAX CUTS

When Republicans propose across the board income tax cuts, the Democrats always holler, “tax cuts for the rich, tax cuts for the rich.” Sounds a little like “citizen’s arrest, citizen’s arrest,” doesn’t it?

UNITED KINGDOM - JUNE 16:  U.S. President George W. Bush waves upon arrival at RAF Aldgerove in Belfast, Northern Ireland, on Monday, June 16, 2008. Gordon Brown, U.K. prime minister said Britain is pushing the European Union to impose new sanctions against Iran, including freezing the assets of its biggest bank, to pressure the nation to give up its nuclear program at a press conference with Bush in London today.  (Photo by Paul McErlane/Bloomberg via Getty Images)

Stephen Moore, of the Wall Street Journal, in his 2008 book, “The End of Prosperity,” indicated that President Bush’s 2001 tax cuts failed to revive an economy still staggering from the bursting of the dot-com bubble. The president’s strategy had been to adopt a demand-side Keynesian stimulus, hoping that putting a few extra dollars in American’s pockets would jump start the economy through increased consumption. This approach faltered, not just because Americans opted to save their rebates, but because it neglected the importance of business investment to overall growth. The economy lagged and revenues stagnated. What the United States needed then (and now) was to stimulate investment, not consumption.

In 2003, President Bush cut the dividend and capital gains rates to 15 percent each, and the economy responded. In two years, stocks rose 20%. In three years, $15 million of new wealth was created. The U.S. economy added 8 million new jobs from mid-2003 to early 2007, and the median household increased its wealth by $20,000 in real terms.

But the real jolt for tax-cutting opponents was that the 03 tax cuts also generated a massive increase in federal tax receipts. From 2004 to 2007, the federal tax revenues increased by $785 billion, the largest four-year increase in American history. According to the Treasury Department, individual and corporate income tax receipts were up 40 percent in the three years following the Bush tax cuts. And the rich paid an even higher percentage of the tax burden than they had at any time in at least the previous 40 years. This was news to the New York Times, whose astonished editorial board could only describe the gains as a “surprise windfall.”

Unfortunately, President Bush allowed Congress to spend away those additional tax revenues when those tax revenues that flowed from the 03 tax cuts could have paid for both the Afghanistan and Iraq wars.

When President George W. Bush was elected, we were in a recession caused by the dot-com bust of the late nineties. The economic prosperity of the nineties, the Bill Clinton presidency years, were fueled by a Republican Congress’s balancing of the budget and the private sector technological revolution which changed forever the way we live our day to day lives.

During the weeks between the determination that Bush had been elected and the inauguration, the main stream media suggested that the word, “recession” not be used to describe our current economic status.  It was the opinion of the MSM that the American people were depressed enough as it was and didn’t need to hear the term “recession.”

However, after the crash of 2008 and the election of Barak Obama to the presidency, the MSM couldn’t use the word, “recession,” enough. In fact they were calling it the “great recession,” and seemed tempted to call it a depression.

The current president, the MSM, and the rest of the Democrats, would have you think that the Bush presidency was one of economic purgatory. Not so. When Mr. Bush first took office, he had the nineties recession or maybe you might call it the “Clinton recession” to combat. Then, there was 9/11 and if you don’t think the first major foreign attack on American soil would not “shake things up,” I have a bridge you might be interested in purchasing. The economy did pick up in late 2003 and 2004 and prosperity reigned until the price of gas began increasing in 2008. And we all know when the price of gas increases when a Republican has the presidency, it is the Republican president’s fault. On the other hand, when a Democrat is in office and the price of gas increases, the president actually has nothing to do with the price of gas. Also, the inverse it true.

Then came the crash of 2008 in the fall of 2008, just before the presidential election. Democrats would have you believe that it was all George Bush’s fault when in fact, the problems began during the Jimmy Carter administration, continued with the Clinton administration’s social engineering in order that all Americans could purchase homes, whether they could afford them or not.

I’ve never seen so much hatred directed toward a president as the left has directed toward George W. Bush.

But that’s okay, they’re Democrats, darlings of the media. It’s okay for them to lie, cheat, steal, and kill because they’re Democrats. Sometime I wonder what it would be like to be a Democrat. I wouldn’t get called the names I do now. I wouldn’t get the threats that I do now. I wouldn’t have lies told about me like I do now. Do I want to become a Democrat? NO…NO…NO!

Note: Thanks goes to the Washington Times and opinion/analyst Ryan Dwyer for his February 2010 article in supplying the above information.

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OBAMA FOLLOWER CLAIMS REFUTED

On Friday, liberals/Democrats/Obama supporters got what they considered some good news on the economic front.
• 280,000 jobs were added in May
• One million jobs added so far in 2015
• Wages grew by the highest level in two years
• 12.6 million jobs created over 63 straight months under Obama, the longest streak of job creation in American history

Well, I guess the “tolerant left” will be kicking their feet up and have their noses stuck in the air so high that if it rained, they’d all drown.

According to Reuters, a surge in job creation and higher wages in May triggered talk that the United States was finally entering a “sweet spot” that would push the Federal Reserve closer to a long awaited interest rate hike.

Behind the headlines, however, data showed a troubling picture that the long-term unemployed and discouraged workers were still being left behind, a key concern that has been repeatedly highlighted by Federal Reserve Chair Janet Yellen.

On Friday, June 5, data showed the United States added 280,000 jobs in May versus expectations for 225,000 and that wage growth nudged up to 2.3 percent from a year earlier, prompting markets to start betting on an October rate hide compared with December.

Despite the surge in new jobs, the headline unemployment rate rose to 5.5 percent as more people entered the labor force, showing the economy is still not creating enough work on a sustainable basis, according to some economists.

The jobs that were created remain primarily in the lower-paid end of the service sector, such as restaurants, leisure, and retail. Wage gains were primarily concentrated in managerial jobs. For non-supervisory jobs, the pace of paycheck growth was 2.0 percent year-on-year in May.

Reuters goes on to stay that still not all who want to work are working. The number of people working part time who wanted to work full time ticked up in May to 6.7 million from 6.6 million and the labor force participation rate is stuck around 62.9 percent, signaling the economic recovery is not complete. The number of people unemployed for twenty-seven weeks or more was at 2,502 million, the lowest since late 2008 but still well above levels seen before the 2007-2009 recession.

Furthermore, in the first quarter, the U.S. economy shrank 0.7 percent and the second quarter recovery has been tepid because consumers have not responded to lower gasoline prices by spending their money on other items.

“Even though job growth was solid, it needs to be sustained over a longer period of time in order to significantly tighten the labor market to the point where we finally see significant wage growth, “ wrote Elise Gould, an economist at the Economic Policy Institute, a left leaning Washington think tank.

According to Forbes, the recession ended four years ago (National Bureau of Economic Research). So, Obamanomics has had plenty to time to produce a solid recovery. In fact, since the American historical record, the worse the recession, the stronger the recovery. So, the current president should have had an easy time producing a booming recovery by now.

The current president likes to tout that we are doing better now than at the worst of the recession. But every recovery is better than the recession by definition. So that doesn’t mean much.

Peter Ferrara, in his Forbes article, goes on to indicate that the right measure and comparison for Obama’s record is not to compare the recovery to the recession, but to compare Obama’s recovery with other recoveries from other recessions since the Great Depression, worse than what every other President who has faced a recession has achieved since the Great Depression.

In the ten previous recessions since the Great Depression, prior to this last recession, the economy recovered all jobs lost during the recession after an average of 25 months after the jobs peak (when the recession began), according to the records kept by the Federal Reserve Bank of Minneapolis. So, the job effects of prior post-Depression recessions have lasted an average of about two years. Under the current President, though, by April 2013, 64 months after the prior jobs peak, almost 5-1/2 years, we have not recovered all of the recession’s job losses. In April 2013, there were an estimated 135.474 million American workers employed, still down about a 2.6 million jobs from the prior peak of 138,056 million in January 2008.

Under President Reagan’s watch the economy suffered a severe recession starting in 1981, which resulted from the monetary policy that broke the back of the 1970s inflation. But all the job losses of that recession were recovered after 28 months, with the recovery fueled by traditional pro-growth policies. By this point in the Reagan recovery, 64 months after the recession started, jobs had grown 9.5% higher than where they were when the recession started, representing an increase of about 10 million more jobs. By contrast, in April 2013, jobs in the Obama recovery were still about 2% below where they were when the recession started, about 2.5 million less, or a shortfall of about 10 million jobs if you count population growth since the recession started.

Obama’s so-called recovery included the longest period since the Great Depression with unemployment above 8%, 43 months, from February, 2009, when the current President’s so-called stimulus costing nearly 1 Trillion was passed, until August 2012. It also included the longest period since the Great Depression with unemployment at 9.0% of above, 30 months, from April 2009, until September 2011. In fact, during the entire 65 years from January, 1948 to January 2013, there were no months with unemployment over 8%, except for 26 months during the 1981 to 1982 recession. That is how inconsistent with the prior history of the American economy the President’s extended unemployment has been.
THE ECONOMY IS NOT THAT GREAT. We’re too much debt and we have excessive regulations. Plus many of the “tolerant left” are posting garbage, thinking they are superior to everyone.

Much of the above was taken from David Chance’s June 5, 2015 article on Reuters.com, entitled, Big Holes Remain in Labor Market despite Blowout U.S. Jobs Report,http://www.reuters.com/article/2015/06/05/us-usa-economy-employment-idUSKBN0OL1YB20150605 , and Peter Ferrara’s June 2, 2015 article on Forbes.com, entitled Economically, Could Obama be America’s Worst President, http://www.forbes.com/sites/peterferrara/2013/06/02/economically-could-obama-be-americas-worst-president/.

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