Chapter 9 What we could have bought with the tax cuts

The Bush Tax Cuts stimulated the economy!

Did they? What could we have bought with the money has been examined on the internet and other places. Other folks say we could have bought free national healthcare, raises for teachers, and some pretty nifty environmental solutions.

But, I was wondering exactly how much did the cuts cost?

Off the top of my head, I remember the first cut cost $1.4 trillion. The next two cost $600 billion for a total of about $2 trillion.

The national debt has increased $4 trillion, so which figure is closer to the real cost?

So let's do it this way. Let's look at what we could have bought to stimulate the economy with two trillion, three trillion and four trillion dollars in federal spending.

Let's start with the $2 trillion dollars.

We could have bought ourselves a tax holiday lasting two and a half years. More exactly, 888 days without any federal income tax.

For $3 trillion, our tax holiday would have been over three and a half years long, or 1,337 days without paying any federal income tax.

If we use the $4 trillion dollar amount, we could extend our happy little holiday to almost five years, or 1,776 days without a penny in personal income tax.

So, for the Republicans with enough courage to read this far, and few Republicans have courage and the ability to read, did you get your five year tax holiday from your Uncle George?

For the average person without a political agenda, the government could have bought everyone who voted in the 2000 Presidential Election a new car made in Detroit.

But, some people would have waited 13 years to get their car. It seems Detroit can't make 110 million cars in a single year, or two and a half years, or five years, or even ten years.

For the average person, my question isn't, "Did you get your new car?" The average person doesn't want the government to borrow money from China even if that means not getting a shiny new car for free.

For the average person, the question is much more simple.

"Did your life improve as much as it should have given the huge price tag on the Republican Tax Cuts under George Bush?"

Chapter 8

The Democratic Congress caused the Reagan Era debt!

No. Looking at the budget messages of President Reagan, Reagan, in eight years, demanded the government spend $7.357 trillion on his agenda. My sources include the US Treasury at www.treasurydirect.gov and the budget messages of Ronald Reagan from 1981 to 1989.

Pretty much a trillion dollars a year.

To that total eight year spending spree, the Democratic majority in Congress added $25 billion dollars a year. Or, to be exact, $197 billion during the entire eight years of Reagan was spent by Democrats.

In 1989, when Reagan finally returned the national checkbook, the checking account was $2.695 overdrawn.

In 199 years, our government had been much more conservative with its money, running up a total debt, including debt for the Second World War of only $930 billion dollars.

That's about $2 billion dollars a year.

In his eight years, Reagan increased the debt by a billion dollars per day, or $76 million dollars a minute.

Roosevelt didn't spend that much in four terms.

Who were the really big dosmestic spenders in the White House? Let's look at a table, listing the biggest spender first, Nixon.



Roosevelt, with his New Deal spending and the largest increase in defense spending in our nations history, barely makes the list.

So Reagan spent the money and created the first trillion dollar debt in American history. Followed by the first two trillion dollar debt. His Vice President, and the next president, would add another trillion in four years.

Chapter 7

Didn't the Reagan tax cuts reduce everyone's taxes 25% across the board?

No, the 1981 tax cutting frenzy eventually resulted in a 100% increase in the take home pay for millionaires with no increase in take home pay for average workers.

In more simple terms:

The top income tax bracket in 1980 was 70 percent. By the time Reagan left office, that rate had been decreased to 33 percent.

So, someone making a million dollars in 1979, paid up to $700,000 in taxes, taking home only $300,000.

By 1988, someone making a million dollars would pay $330,000 in federal taxes at the most and take home $670,000.

The average taxpayer was promised a 15 percent cut but only a 5 percent decrease was ever signed into law by Reagan. Reagan signed the largest peacetime tax increase in the nation's history in 1983. Those taxes fell on the middle class and all working class people.

Chapter Six

Can tax cuts stimulate the economy and help balance the budget?

A simple no should answer this question. If a simple No doesn’t cut it for some Republicans, remind them:

Taxes were cut in 1964 and the budget wasn’t balanced and the debt increased.

Taxes were cut in 1981. The budget deficit grew faster than kudzu and the debt doubled.

Taxes were cut in 2002. The deficit grew at record amounts and the debt reached $10 trillion dollars. (Or, it soon will reach $10 trillion. As of June 1st, we owe $9.4 trillion.)

The most recently balanced budget was under President Clinton following a tax increase.

Current information on the public debt can be found at this Treasury Department webpage.

How about a chart that gives a nice visual.






If Republicans still can't believe their eyes, they're blind and shouldn't be allowed to vote.

Since 1980 the debt has increased tenfold. In simple words, the debt under Carter was 930 billion dollars. After 8 years of Reagan, 4 years of Bush I, and 7 years of Bush II, the debt is ten times greater.

Two hunderd years to reach a national debt a trillion dollars, Three Republican Presidents later, $9.4 trillion in borrowing.

To pay off the debt in thirty years, like a normal mortgage, it would take $57 billion dollars a month. Or, abut $750 billion dollars a year.

That's three quarters of a trillion dollars a year, for thirty years to pay off a $10 trillion dollar debt.

However, we don't have that money because we're borrowing half a trillion dollars a year.

So, to pay off the national mortgage, the federal government needs $1.3 trillion dollars more per year.

Schools in Georgia

Education arguments continue.

Six years of Republican control means less money spent on education and more students failing a standard set in 1980. Not to mention the No Child Left Behind criteria.

In Hall County, the school system ran a 6 million dollar deficit after projecting a $700,000 surplus.

Full story in the Gainesville Times. Taxes will have to be raised about $200 to $300 per $150,000 home. There's a huge uproar about, ... Where did the money go?

Home foreclosures? $5 per gallon diesel fuel? Similar increases in electricity, food, water ... Odd, isn't it, when the number of homeowners paying taxes decreases at a record NATIONAL pace, the school system doesn't have as much money.

And, oddly enough, when developers walk away from huge developments without paying their taxes, school revenues go down.

A 700 home development, Seasons on Lanier, collapsed violently when Levitt and Sons filed for Chapter 11 in November 2007. (Story in Gainesville Times) That one development left houses partly built, buyers lost downpayments, workers lost paychecks, subcontractors lost about a million in unpaid work. Wachovia bank lost over $100 million, so far.

IN June 2007, Levitt and Sons were inducted into the National Association of Home Builders' Hall of Fame! (link)

In Florida, Levitt also walked away from a development, leaving over a $100 million in community losses. Full story in Orlando Sentinel.

"But, the housing crisis ins't a big problem. Let's cut some taxes!" John McCain.

Or, "We could run the whole country on a national sales tax!" John Linder et al...

When there's no money for education, why is there any discussion of teachers? Classrooms? ...

It's the economy, stupid.