In 2001, President George W. Bush signed the Economic Growth and Tax Relief Reconciliation Act, the largest tax relief package in a generation. In 2003, President Bush proposed and signed the Jobs and Growth Tax Relief Reconciliation Act. Among other things, the Economic Growth and Tax Relief Reconciliation Act reduced tax rates for every American who paid income taxes. It also created a new 10 percent tax bracket. Of course we all know that the Democrats called this tax cuts for the rich, when in effect everyone who paid income taxes received a tax cut. Those not paying income tax would not obviously receive a cut.
Despite being in a recession, due to the .com bust, and 9/11, the economy returned to growth in the fourth quarter of 2001 and continued to grow for twenty-four consecutive quarters. The economy grew at a rapid pace of 7.5 percent above inflation during the third quarter of 2003, the highest since 1984. The President’s tax relief also reduced the marginal effective rate on new investment, which encourages additional investment and, in the long-run, higher wages for workers.
The President’s tax relief was followed by increases in tax revenue. From 2005 to 2007, tax revenues grew faster than the economy. The ratio of receipts to GDP rose to 18.8 percent in 2007, above the 40-year average. Between 2004 and 2006, capital gains realizations grew by approximately 60%. Growth in corporate income tax receipts was strong in President Bush’s second term, nearly doubling between 2004 and 2007. With nearly all of the tax relief provisions fully in effect, the President’s tax relief reduced the share of taxes paid by the bottom 50 percent of taxpayers from 3.9 percent in 2000 to 3.1 percent in 2005. The share of taxes paid by the top 10 percent rose from 46.0 percent to 46.4 percent.
President Bush’s first budget in 2001 warned that “financial trouble of large GSEs (government sponsored enterprises) could cause strong repercussions in the financial markets.” In 2003, the Bush administration began calling for a new GSE regulator. Despite resistance from Congress, President Bush continued to call for GSE reform until Congress finally acted in 2008 to provide the additional oversight the President requested five years earlier. Unfortunately the reform came too late to prevent systemic consequences.
There you have it folks, during the George W. Bush presidency, our economy was strong, wealth was created and this nation prospered. While President Bush was aware that the financially troubled GSEs (Fannie Mae and Freddie Mac) would result in dire consequences, he was unable to get additional oversight for these entities until 2008 when “all hell broke loose.”
Yet, we’ve had to listen to six years of the current president blaming George Bush for a devastated economy that was the result of his “tax cuts for the rich.” I’ve been tired of this president’s rhetoric and lies since day one of his presidency.
We did have a slightly less than six year period of economic growth and prosperity when Bill Clinton was president, a period from approximately 1994 to 2000. This period of grown ended when Federal Judge Thomas Penfield Jackson ordered the breakup of Microsoft into two companies, citing that the company was “untrustworthy.” I remember that day well. I was in between careers, studying computer programming. I was listening to the radio, yes, Rush Limbaugh. During his program that day, he was continually reporting on the falling Dow Jones. This ushered in the recession of 2000 that lasted approximately one year.
What spurred the period of prosperity during the Clinton years? The entrepreneurs of the technological revolution were responsible for this era of economic growth. President Clinton, to his credit, backed away and let it happen. Think about the way you were doing things in 1992 and think about the way you are doing things now. Think about your office environment in 1992 and think about your office environment now. Many of you are now home workers. In 1992, none of us could even imagine how that would work. The term, Internet, didn’t exist. I guess Al Gore was still working on it in his basement. We had to rely on newspapers and TV for our news, although, CNN was broadcasting 24/7. Cell phones were just beginning to become affordable for the middle class. By 1999, our way of life had totally changed and it’s continued to rapidly change since that time, although, I still have some friends who are stuck in the 1980s and will probably continue to be stuck there for the rest of their lives.
What spurred the period of prosperity during the Bush years? More of the same. While President Bush signed into law the measures I cited in the first paragraph, these measures didn’t create the prosperity. Instead, they widened the road to accommodate more innovation. While most of us had cell phones in 2000, all we could do was call someone on them. By 2008, smart phones had been introduced where we could send and receive email, text messages, and download numerous applications to satisfy whatever needs we had. While widespread use of tablet PCs didn’t begin until around 2010/2011, innovation was occurring behind the scenes. Also, everyone was making the transition from bulky desktop computer systems to laptops. Laptops became smaller, lighter, more powerful, and cheaper. Now, almost everyone has a laptop as their main device.
The economy does seem to be turning the corner and we all are hoping that it does. Gasoline prices are falling due mostly to the innovation of hydraulic fracturing, an innovation that most liberals despise and want to end. Also, oil exploration has increased in recent years on state and private lands. According to americanenergyalliance.org, the U.S. Bureau of Land Management issued fewer leases in fiscal year 2014 than in any year since 1988 (though they leased slightly more acres than were leased in 2013). Also, according to americanenergyalliance.org, drilling permits languished in regulatory morass, resulting in production on federal lands becoming stagnant or declining. On state and private lands, oil production has surged to a 25 year high, making the U.S. the largest combined oil and gas producer in the world.
Yes, the current president’s administration has mostly avoided imposing new burdens on oil and gas development on state and private lands, much to the chagrin of this president’s constituency. However, according to americanenergyalliance.org, that could soon change. The BLM is preparing first-ever federal regulations for hydraulic fracturing and the EPA is gearing up to issue methane regulations for natural gas production.
Could this energy boom grind to a halt if burdensome regulations are placed on oil exploration on state and private lands? Absolutely! When will the burdensome regulations start having their effect? Possibly right after a Republican assumes the Presidency in January 2017? Gas prices could rise and energy bills could increase. And there sits the mainstream media waiting to pounce on the new Republican president. But wait, we have a Republican majority in Congress, surely they will stop this. While I’m a committed Republican, I’ll be the first to admit that there are many wimps and rhinos out there who just might be pressured into backing some regulations on oil exploration on state and private lands. And even if they don’t, this president has a phone and a pen; he’ll impose them through executive orders.
If a Republican is elected president in 2016, will that president have the “nads” to go through and reverse those executive orders? I don’t know. If he or she does, he’ll have the mainstream media and the liberals on his tail broadcasting to everyone that the Republicans want us to have dirty air to breath and dirty water to drink. While certain media outlets will most definitely attempt to tell the truth, these outlets will be called liars and worse. If he or she leaves them in place, the energy boom will become an energy bust and we know who will get the blame.
Am I depressed about what I just wrote? A little. But I’m still keeping the faith. Despite the current president continually trashing Republicans in almost every speech he makes, and a mainstream media that is in the tank for the left, Republicans managed to win majorities in the House and Senate in November. We’ve won elections and I pray we will continue to win elections even though this president is doing everything he possibly can to increase the number of Democrat voters while he’s still in office.
While this post is full of information that I hope all of you will save and use when necessary, its purpose is to indicate that it is not the government that creates wealth and prosperity, it’s the entrepreneurs out there with their undying entrepreneurial spirit that have made this nation the wealthiest and most prosperous on the planet. Yes, we have government leaders that try to break that spirit and the current president has done just that, but when the going gets rough, these individuals have kept on going. That’s the United States of America.