Washington Post: The Bush Tax Cuts “Plunged The Nation Into Debt”

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The editorial board of the Washington Post took a shot at Mitt Romney today, demanding to know how he’d lower American taxes without decreasing revenue. As rationale for their criticism, they cite the Bush tax cuts which according to them “plunged the nation into debt” after 2001 and 2003:

REPUBLICAN PRESIDENTIAL nominee Mitt Romney is specific about how much he will cut income tax rates for every American: by one-fifth. But he is vague about how he’ll pay for this, though he insists he can cut rates without losing revenue.

The danger is a repeat of 2001 and 2003, when President Bush and Congress enacted tax cuts that plunged the nation into debt.

The problem with this claim is that it isn’t true. Here’s a graph showing federal revenues and spending by year during the Bush years and the beginning of Obama’s term (numbers from the Tax Policy Center):

What we see are federal revenues beginning to decline from the end of the Clinton administration into the Bush administration, and then plunging during the post-9/11 recession. The Bush tax cuts begin to have an impact after 2003, and we see a steady rise in federal revenues until 2007 at which point they drop off again into the 2008 fiscal melt down.

Throughout these ups and downs, however, federal spending maintains steady growth, accelerating with the election of President Obama.

The Washington Post blames the Bush tax cuts for creating deficits by lowering revenues, but that’s demonstrably not true. Federal tax revenues grew after the Bush tax cuts. What created deficits the refusal of our political leaders – both Republican and Democrat – to match federal outlays to revenues.

In other words spending, not tax cuts, created the deficits.

Rob Port is the editor of SayAnythingBlog.com. 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. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • Wayne

    this is just more of the ‘It’s Bush’s fault that the Democrats have used for over ten years now. I’m still surprised at how well it works on the sheeple.

    • $8194357

      Maybe it will soon be Romneys fault , huh.

  • mickey_moussaoui

    This is smoke screen politics. The real problem is government spending

  • Spartacus

    Of course they did. Mandating banks make zero down housing loans to people that are totally and completely incapable of making mortgage payments much less saving enough for a minimal down payment against such a loan, thus causing the housing market to crash, had nothing to do with it. Just ask Barney Frank.

    • ellinas1

      “The threat to our financial system wasn’t the individual homeowner behind on his payments, but rather the creditworthiness of all those institutions whose zest for a greater return in a low interest rate environment led them to buy CMOs, SIVs, and other sub-prime mortgage backed derivatives which they should not have purchased. ”
      – Bat One, Dec 6, 2007

      • robert108

        None of those subprime instruments would have existed if not for the CRA, born under Carter and increased under Clinton.

        • Dakotacyr

          Oh, here comes the poor people caused the crash meme, that has been debunked over and over again, but if it helps you sleep at night…..

          • Spartacus

            Not poor people, dumbass. Rich Democrats insisting everyone but themselves pick up the tab. Ironically, after 6 years of failed policies people like you still can’t recognize the error of your ways. And yet you wonder why you’re chastised. Obviously brilliance isn’t a progressive characteristic!

          • http://sayanythingblog.com Rob

            Nobody is blaming poor people. We’re blaming, rightly, outrageous housing policy which created a market bubble by lowering lending standards.

            It really doesn’t take a rocket scientist to figure out that giving mortgages to people who really can’t afford them would eventually result in a crash.

            This is also what has happened in student loans. The government-backs borrowing, and lowers lending standards, and we get a bubble.

            Maybe that’s now how things work in liberal fantasy land, but out here in the real world 2+2=4.

          • Spartacus

            What’s really pathetic is that he fails to see that not only is he now trying to use “the poor” as his scape goat but he fails to recognize that the political party he chooses to align with is still exploiting them without ever having offered them a solution that empowers them (the poor) as individuals, other than to offer to levy even more taxes upon those that would employ them. All Hail the Nanny State, here’s some food stamps!

          • http://sayanythingblog.com Rob

            Right. It’s a transaction. They’re buying votes with entitlements and social programs.

          • $8194357

            Since FDR it is the standard operating proceedure
            for the socialis/communistt left.

          • $8194357

            Don’t forget to vote early and often…

          • robert108

            Wrong again; it was the Dem affirmative action home mortgage mandates that produced the bubble that Chuck Shumer popped just in time for the ’08 election. The poor people were exploited by the Democrats, as usual.

        • $8194357

          Socialisms slow creep into crony capitalist America…

        • ellinas1

          The time is 22:46 hrs.

      • Spartacus

        Hi E, long time no see! How does the air smell in your neck of the woods? I understand you’ve got a problem out there that your bureaucrats are trying to blame on the Salton Sea. Are they sure it’s not a problem that could be resolved by mandating their “guests” bathe regularly? Just asking because they don’t have that problem in Elkhart.

        • ellinas1

          The air smells really nice in my neck of the woods, especially when we get the Delta breezes that blow the cooling Pacific ocean air our way.

          LA got a blast of hydrogen sulfide or sewer gas as it is commonly known. Organic decaying matter did it.
          No amount of bathing will take the stench away.
          If you remember, many years ago something similar happened somewhere in Africa, a lakes bottom erupted causing deadly gasses to rise and escape in the atmosphere killing anything that lived in and around the lake.

      • Spartacus

        So now you’re saying that while it’s convenient Bat is a reliable source except when his material is inconvenient to your cause? Could you possibly prove to be any more pathetic???

        • ellinas1

          Just so you know, I kept Bat’s response all these years because he was telling the truth, and at the time what he said was contrary to the CRA meme.
          I believed then as I do now. The CRA had nothing to do with anything.
          Greed and deception sunk the housing market, not the CRA.
          If a lending Institution does not want to lend money to Joe without a job Schmoe who is not creditworthy and unable to repay, nobody can make them.
          If the “government’ or Barney Frank are forcing me the banker to loan money, I will go to every news outlet and expose the rascals. Every TV news hour, all radio stations with news programs, every fucking newspaper, every congresscritter would know.
          I’d rather go to prison the lend money to Joe without a job Schmoe.
          Neither my views, nor I are pathetic.

  • Patrick R. Pfeiffer

    Rob as you know this is my big area of focus and this shit drives me crazy.
    The fact that reductions in the RATE of taxation INCREASE tax revenue every time is readily available and easily documented informaton and yet the economic illterates, agenda-driven press and ideologues on the left continue to get away with the “big lie” year after year and inept Republicans seem ill-suited or insufficently motivated to set things straight..
    Secretary Mellon in the 20’s; JFK; Reagan; Bush.
    Reductions in the rate of taxation increase tax revenue.
    If your teenage daughter makes $200 per month at BK and is charging $1,000 per month on your credit card to you suggest she deliver pizza a night a week or CUT UP THE DAMN CREDIT CARD and maybe ground her until she gets the picture?

    • Bat One

      Also Presidents Gerald Ford and Bill Clinton signed tax rate reductions into law, and in all cases both tax revenues and economic activity increased.

    • http://sayanythingblog.com Rob

      I’d only clarify by saying that reducing tax rate doesn’t increase revenues every time. Only when tax rates are above a certain prohibitive level does this happen (thus the laffer curve). Once you get below a certain rate, you cut into revenues.

      The simple truth is that overall tax revenues went up, thus you cannot argue that the tax cuts caused deficits.

      • robert108

        It’s not all that complicated; an income tax rate reduction puts more money into everyone’s paycheck. Whether they spend it, save it or invest it, there is economic stimulus, guaranteed.
        The real problem is that govt spends too much, and wants to distract from that fact by whining about tax rate reductions instead of cutting back spending to match revenue. Economic history teaches that when total taxes go over 20%, people start avoiding them. We aren’t anywhere near that point. Even if we went below 20%, we would have to make a cost/benefit calculation to determine how much govt we really want.

      • Patrick R. Pfeiffer

        I’ll grant your hypothetical, tax rates “could” be low enough that reducing them further could lower revenues. However I’ll add that every time in actual American History rates were lowered the existing rates were punative and counter-productive and hence, revenues increased.
        Now of course completely untouched in this debate is the quesiton of HOW MUCH SHOULD THE FEDERAL GOVERNMENT BE ALLOWED TO GET AND HOW BIG SHOULD IT BE ALLOWED TO GROW? As if “getting the Federal Government the maximum revenue” ought to be a goal!
        How about this, we allow the Federal Government just enough funds to peform it’s constitutionally mandated roles-which it could easily do on about 40% of it’s current receipts!
        I also notice that Federal Spending graph only seems to go one direction…

  • Hannitized, Proofs obsession

    Conservatives like Rob have continued to tell the lie that the bush tax cuts increased revenue, when it was simply the 9/11 crash that returned revenues to normal levels, after fears of another attack had subsided.

    The bush tax cuts plunged the nation in debt. Americans have known this for over 6 years.

    • Onslaught1066

      Hey there lil feller, you seem lost.

      Obama announced that he had reached a decision to extend the
      Bush-era tax rates for another two years. “It’s just the right thing to do.”

      Barrack Hussein Obama 12-6-2010

      There, that should help.

      • WOOF

        What actually happenned…….”The measure also will guarantee unemployed workers in hard-hit states up
        to 99 weeks of jobless benefits through the end of next year. And it
        will create major new incentives for business and consumer spending in
        2011, including a two-percentage-point reduction in the Social Security
        payroll tax that would let workers keep as much as $2,136.” Tune in1066

        • Onslaught1066

          So then, you wouldn’t object to to congress blocking Dumb-O’s knee jerk obsession with punishing successful business owners with confiscatory tax increases, and instead help Zero find his way clear to keeping current tax rates as they are, in spite of himself?

        • robert108

          Right. What obama giveth(in President Bush’s name), he then giveth away to his cronies.

    • Gern Blanston

      So your argument is that revenues should have increased even more than they did between 2003 and 2007? I am still uncluear how those tax cuts plunged us into debt when revenues were rising from ’03 to ’07.

      • Hannitized, Proofs obsession

        Yes, you are unclear.

        Revenues were “increasing” between 2003-2007, they were returning to their pre 9/11 levels once fears of another attack subsided.

        People stopped saving and started spending. The same thing will happen when bad Americans stop trying to make business owners insecure with the lies about our president supposedly being a socialist. Billionaires are holding on to their money, when they could spend it to hire, now.

        • robert108

          They returned to those levels because the tax rate reductions stimulated the economy and quickly pulled us out of the Clinton/9-11 recession. You got one right, little hanni.

        • tony_o2

          The rich are saving their money in anticipation of what Obama himself has told them. There is no “supposedly”. There is no conservative conspiracy that Obama wants to raise capital gains taxes. Obama himself has made this clear.

          When you invest money, there is a good chance that you will lose part of it. This risk is outweighed by the chance that you will make money. If the rewards look better than the risk, you invest. If it doesn’t, you save.

          When you raise these taxes, the rewards get smaller. When the rewards to risk ratio gets smaller, people reduce their investments and save for later.

          If Obama is re-elected, expect private investments to remain low. He is really pushing this tax-hike, and investors are nervous about their risks. If Romney is elected, investors will not be threatened by potential tax-hikes. This will jump-start the private investment needed to run successful companies that provide jobs. In turn it will put people back to work and have a positive effect on our economy.

          • Gern Blanston

            Crickets from Hanni.

        • Gern Blanston

          Actually, we returned to the the Pre-9/11 revenues by June-ish of 2004. How about the remainder of the increased revenues? Oh, right: that was just folks spending their savings. They must have been saving instead of spending leading up to 9/11, right?
          Yes – and Billionaires don’t spend their money because conservatives convinced them that Obama is a socialist. We sure have a lot of wimpy billionaires who don’t think for themselves! I guess that pretty much exemplifies those who have achieved that level of success…

          • Hannitized, Proofs obsession

            and Billionaires don’t spend their money because conservatives convinced them that Obama is a socialist. We sure have a lot of wimpy billionaires who don’t think for themselves!

            That certainly is BO and Donny Baseball’s contention. That corporations aren’t hiring until Obama is voted out.

            Argue with him.

      • ellinas1

        Take a good look at this.
        It is from the link Pob Port provided.
        It debunks your theory with facts:
        http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

    • Carl

      “The bush tax cuts plunged the nation in debt.”

      No wonder obama keeps extending them. It fits right into his plan to bring down the USA.

    • Bat One

      Apparently you don’t do any better with numbers than you do with English words. If you check the table so thoughtfully provided by ellinas you’ll see that not only was the deficit diminishing every fiscal year from 2004 through 2007 (the major Bush tax rate cuts were passed in mid 2003), you’ll also see that the total of federal deficits from 2004 through 2008 is less than any single year’s deficit since Obama took office.

      I could look up the URL of Obama’s campaign promise to cut the deficit in half during his “first” term, but then you fancy yourself an expert so I’ll leave it to you to refresh your own memory.

    • robert108

      A crash increased revenues? What planet are you on, little hanni? Clinton cost us trillions by enabling 9/11, which was an EXPENSE. Try some accounting.

      • Bat One

        A better idea would be to start him off with English composition and arithmetic.

  • WOOF

    Why GW Bush is being held prisoner in a Republican basement.
    Heritage Foundation’s Brian Riedl
    admits: “the 2001/2003 tax cuts played some role in keeping revenues below
    their historical average for most of the 2000s, but the country was also
    recovering from a recession at that time, too.” [Heritage Foundation, 7/29/10]

    Bush Cuts Followed By
    Slowest Jobs Growth Since The End Of World War II. According to a report by the Center for
    American Progress, “from March 2001 to December 2007
    the economy added 1.8 million jobs for workers aged 25 to 54, only 22,000 per
    month. That translates to an average annualized growth rate of only 0.3 percent
    per month-the slowest of any cycle on record since the end of World War II and
    one-fifth the growth rate during the 1990s.”

    • Onslaught1066

      Have you heard the Good News.

      Obama announced that he had reached a decision to extend the
      Bush-era tax rates for another two years. “It’s just the right thing to do.”

      Barrack Hussein Obama 12-6-2010

      Your savior hath said it, so let it be done.

      • Snarkie

        So you agree with Obama on Tuesdays?

        • Onslaught1066

          So you agree with Bush on Tuesdays?

          A very piss-poor attempt, Buttfuckle.

          Don’t you have a wife to kill… Glue to sniff, perhaps?

    • tony_o2

      When unemployment levels are low, less jobs are created. You can’t create a job if you can’t find someone to work.

  • Albert Lickenspittle

    Got to love the spinnerroo. Of course he never mentions the cost of Bush’s wars. Rob has spinning fever worse than even Rush.

    • Onslaught1066

      Obama announced that he had reached a decision to extend the
      Bush-era tax rates for another two years. “It’s just the right thing to do.”

      Barrack Hussein Obama 12-6-2010.

    • Gern Blanston

      According to the graph, the spending was increasing year-by-year during the heart of the wars, yest revenue was ‘catching up.’ Until the financial meltdown -then outlays skyrocket despite reduced revenues. It jsut strikes me that had we not spent on those wars, we’d still be in a finaincial crisis, based on the exponential growth in spending since the Dems took control of congress in 2007.

    • robert108

      The cost of Afghanistan is less than one trillion in 11 years, while obama racks up that much every year in new debt.

    • Bat One

      Idiot! The cost of anything paid for or purchased by the government is an EXPENSE to the government. This thread is about REVENUES. The wars in Iraq and Afghanistan have nothing to do with the revenues taken in during the Bush presidency. Please try to pay attention, or better yet, stay out of conversations that are over your head and above your intellectual pay grade.

      • robert108

        Since liberals regard all our money as belonging to the govt, they have no need to differentiate between revenue and expenses. That would be real knowledge, not propaganda.

  • Albert Lickenspittle

    Naturally when Bush deprived the country of 700 billion by dropping taxes on the rich that had absolutely no effect. You can sell your crap to the Hoopleheads Rob, but no one who reads would every buy your total BS.

    • Onslaught1066

      Obama announced that he had reached a decision to extend the
      Bush-era tax rates for another two years. “It’s just the right thing to do.”

      Barrack Hussein Obama 12-6-2010

    • Gern Blanston

      a well-thought, intelectual rebuttal to Robs post – as always from ‘Albert’. How do you look at exponential growth in spending and blame tax cuts for deficits? What has that spending bought us, Albert? SHovel-ready jobs the President now admits didn’t exist? Solyndra-type ‘investments’? A sweetheart deal for the UAW in the wake of the modified GM Bankruptcy? Mssive increases in the government work force? Do tell…

    • jl

      “No effect..” How so? it put more money in the people’s pocket that earned it, which allowed them to spend more. Mr. Lickalittle, that’s always a good thing.

      • Bat One

        The sock-puppet is just regurgitating. Pay it no attention.

        • $8194357

          Always

    • Bat One

      when Bush deprived the country of 700 billion by dropping taxes on the rich…

      Again, for the slow-witted liberal, I don’t believe you can prove that the Bush tax rate cuts cost the US government $700 billion in lost revenue. I’m sure thatere are all manner of liberal talking points websites that are propagating this nonsense, but again, I don’t think you can prove what you’ve repeatedly stated as fact.

    • robert108

      Wrong. He left that money in the pockets of the civilians who earned it, thus stimulating the economy. No deprivation, except for greedy Democrat spenders.

  • mikemc1970

    Even a simpleton liberal can easily read that graph and understand the significant jump in tax revenue that the Bush tax cuts brought about. The trolls here will be totally stumped.

  • Dakotacyr

    Obviously you can’t read a graph, Obama didn’t take office till late January 2009. Spending increased throughout Bush’s eight years escalating in 2008. He didn’t veto a single spending bill in his eight years.

    • http://sayanythingblog.com Rob

      Not that I’m going to defend Bush’s spending, but you’re the one who can’t read a graph. That last spike goes up to the 2009 spending total. Obama was President in all of 2009.

      • Spartacus

        Facts are lost upon the clueless. Why do you continue trying?

        • http://sayanythingblog.com Rob

          I’m an optimist.

    • robert108

      The spending of the last two years was on the Pelosi/Reid Congress.

  • $8194357

    BDS…
    Four years later…
    The evil Bush did it..

    Shameless.

    The Deafness Before the Storm —
    NYTIT was perhaps the most famous presidential briefing in history.

    On Aug. 6, 2001, President George W. Bush received a classified review of the threats posed by Osama bin Laden and his terrorist network, Al Qaeda. That morning’s “presidential daily brief” — the top-secret document prepared by America’s intelligence agencies — featured the now-infamous heading:

    “Bin Laden Determined to Strike in U.S.” A few weeks later, on 9/11, Al Qaeda accomplished that goal.

    On April 10, 2004, the Bush White House declassified that daily brief — and only that daily brief — in response to pressure from the 9/11 Commission, which was investigating the events leading to the attack. Administration officials dismissed the document’s significance, saying that, despite the jaw-dropping headline, it was only an assessment of Al Qaeda’s history, not a warning of the impending attack.

    While some critics considered that claim absurd, a close reading of the brief showed that the argument had some validity.

    Continue Reading on

    weaselzippers.us …

    End quote

    And Bill was busy with his human humidor when the
    target was available for deployment..
    Shoulda, woulda, coulda….

    Romney will get tagged for the coming finacial collapse
    as well as Bush “if” Barry is defeated in November as well IMO..

  • http://flamemeister.com flamemeister

    Obama must have believed this to be true, since he continued the Bush tax cuts and one of his goals is to bankrupt the nation.

  • http://realitybasedbob.sayanythingblog.com/ realitybasedbob

    In other words

  • sbark

    Clinton—the Housing Arsonist set things up to fail, for all his bloviating about his balanced budgets, he set the USA economy up for the big fall with plausible deniability.
    from IBD…….its more than a 10 second read, so Liberals work on your attention span …
    First, using his executive order powers, he marshaled 10 federal agencies under the little-known Interagency Task Force on Fair Lending to enforce new “flexible” mortgage underwriting guidelines to combat “lending discrimination in any form.”
    For the first time, banks were ordered to qualify low-income minorities with spotty credit.

    The 1994 policy planted the seeds of the mortgage crisis, as lenders abandoned prudent underwriting standards altogether.
    The next year, Clinton set numerical targets for lending in predominantly minority census tracts under a revised Community Reinvestment Act, and added several hundred bank examiners to enforce the tougher CRA rules. Banks that failed had their expansion plans put on hold, a slow death sentence in an era of bank mergers and acquisitions.
    For the first time, CRA ratings were made public, egging on Acorn and other radical inner-city groups, who used the reports to extort banks for more than $6 trillion in subprime and other loan set-asides by 2008.
    When bankers resisted being saddled with so many additional risky loans, Clinton tapped Fannie Mae and Freddie Mac to take them off their books, while freeing bankers to originate more of the political loans. He directed HUD to hike Fannie’s and Freddie’s goals for underwriting affordable loans, which remained in force throughout the 2000s.
    When the mortgage giants pushed back, complaining it would be hard to meet the higher targets, Clinton pushed them to load up on subprime loans.
    He also authorized Fannie and Freddie for the first time to buy subprime securities to earn credits against the HUD goals. The mortgage giants jumped at the chance, since it allowed them to meet the onerous new goals.
    A 2005 HUD report attributed the explosion in subprime securities between 2001 and 2004 to HUD’s tougher goals, along with tougher CRA enforcement. Between 2004 and 2006, the mortgage giants bought $613 billion, or 20%, of the private-market securities created to meet their demand under HUD rules.
    For good measure, Clinton late in his second term installed several of his cronies, including Franklin Raines, on the inside of Fannie and Freddie. They in turn bought loans from Countrywide and other subprime lenders, who signed “fair lending” contracts with HUD obligating them to meet lending quotas.
    Thus the government created a feeding frenzy for subprime loans by putting Fannie and Freddie and private lenders in competition through quota systems enforced by HUD and Treasury.
    At the same time, Clinton enlisted prosecutors to sue banks and lenders for allegedly discriminating against minority borrowers, driving banks and subprime lenders deeper into risky areas.
    Clinton’s policies for the first time threw millions of previously unqualified buyers into the mortgage mix, many of whom later refinanced into even riskier adjustable-term subprime loans which defaulted in droves before the crisis.
    Clinton’s easy-credit orgy fed a historic bubble that began in 1997 and finally burst in 2007.
    Like an arsonist-turned-firefighter, Clinton now deigns to want to save a housing industry he torched during his presidency, while fingering others for the financial crime.

    • $8194357

      A big 10X…
      The socialist left has set the policies the Cloward/Piven strategy uses to bankrupt and destroy this once capitalist country.

  • Snarkie

    When you increase government spending and cut taxes at the same time, that leads to debt.

    Did you know that?

    • http://sayanythingblog.com Rob

      But that’s a static analysis. Obviously the economy reacts to tax cuts, and often that reaction is more activity which, in turn, spurs more tax revenues.

      That’s why, after the Bush tax cuts, the actual numbers (we’re not talking about conjecture here, this is math) show rising federal revenues.

      The problem, as you note, is that spending growth outpaced growth in revenues.

    • http://nofreelunch.areavoices.com/ Kevin Flanagan

      The problem is Obama’s policies have choked off the velocity of money.

    • robert108

      Every Democrat administration has taught us that, but they keep doing it anyway. President Bush spent like a frugal Democrat, and you hate him for it, because you didn’t get to buy any votes with that money.

    • tony_o2

      So cut spending.

  • Harold

    Why don’t we go with a 15% national sales tax on point of purchase and do away with IRS altogether or a 15% flat tax with only exemptions food and medical care. Seems to me that would solve alot of our problems cuz everyone would have to pay it. That corporate jet which is now used as a write off would be taxed at 15%.

    • http://nofreelunch.areavoices.com/ Kevin Flanagan

      I’ll consider it only if you grandfather the value of all the assets I’ve already accumulated, otherwise I’ll be taxed again when I spend the money.

    • robert108

      When it comes to taxes, the last thing the liberals want is equality.

  • Harold

    I think Bush was a spender too, and that helped contribute to where were at now, and Obama has unplugged the dike on spending completely and makes Bush look like a miser in his spending through his 2 terms.

  • Lynn Bergman

    In the first seven years of the Bush Administration, the Deficit as a percent of GDP went DOWN.

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