The Bush Tax Cuts Didn’t Create Deficits, They Narrowed The Deficit Gap


Investor’s Business Daily points out that, while President Obama blames deficits on the Bush tax cuts, the reality is that the nation’s budget cap narrowed significantly after they were implemented. In fact, were it not for the housing bubble bursting, the nation might have been able to go backward on the national debt.

And you don’t have to take my word for it. Obama’s own economic advisers have tacitly admitted as much.

Here’s the chart:

From IBD:

While President Obama insists the Bush tax cuts caused the recession and record deficits, his own economists say otherwise.

He might want to consult their data for the truth.

Kicking off fiscal cliff negotiations last month, Obama said: “What I’m not going to do is extend Bush tax cuts for the wealthiest 2% that we can’t afford and, according to economists, will have the least positive impact on our economy.”

During the White House press conference, he added, “If we’re going to be serious about deficit reduction, we’ve got to do it in a balanced way.”

Obama argued voters made it clear in the election that they don’t want to go back to Republican policies that “cost” the Treasury revenues and “blew up the deficit,” as he told them repeatedly during the campaign.

The Washington media by and large share these assumptions. And they’re driving the debate over what to do about the federal budget crisis before Jan. 1, when the tax cuts and spending programs are set to expire.

But the assumptions are faulty, based largely on political demagoguery rather than hard numbers — including ones certified by Obama’s own fiscal policy advisers and bean counters in the White House. . . . Based on Bush fiscal policies, the nonpartisan Congressional Budget Office projected budget deficits of 0.7% to 1.5% of GDP for the years 2008 through 2011. The CBO even predicted surpluses for the subsequent years through 2018. . . . Obama’s economic report shows that the average deficit-to-GDP ratio during the entire Bush administration — 2001 to 2009 — was 2%, which is well below the 50-year average of 3%. During the Obama years, in contrast, the same deficit ratio has averaged 9.1%.

Our problem is not taxes. Our problem is spending.

Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

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  • mickey_moussaoui

    Democrat congress created the deficit with their manipulation of the housing credit process. Then they ( banks ) flooded the world with bad paper ( derivatives ). Now it’s so far out of control there is little hope. Enter big government to the rescue.

    Rather nefarious of them. Tar and feather the bastards

  • SigFan

    Damn those pesky facts! Now everyone stand back – pointy liberal heads exploding in 3 … 2 … 1

    • Snarkie

      Tell us again how you want Bush back because Obama doesn’t grow the Federal gov’t as well as Bush did. Go on. Say it.

  • matthew_bosch

    So when one enacts policies that reinforce the health and well being of a revenue base, that revenue base produces more revenue?
    The Democrat Socialist party has Munchausen Syndrome by Proxy. They poison the government with fanatical spending and public disdain for its revenue base, while pleading for attention and help from entitlement voters to cure it.

  • yy4u2

    Clinton did not have sex with that lady…but he did narrow the gap though.

  • Guest

    Revenue were growing about the same right before and after the tax cuts, of course they’d eventually reach the same levels as before. Stop crediting normal/slightly sluggish gdp growth as some miracle of Bush tax cuts; revenue would’ve been even higher without the cuts.

    • mickey_moussaoui

      like that is working now? ….hahaha
      obamanomics aint working

      • Snarkie

        If you mean we don’t have the volatile, artificial growth… then no, it ain’t working.

  • WOOF

    Investors Business Daily Vs. Congressional Budget Office.

    • Pdog

      I think I’ll trust the guys that invest their own money over the politicians that spend other people’s money.

      • WOOF

        They don’t invest their own money, they sell advertising.

  • mickey_moussaoui