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Originally Posted by wutitiz
Thomas Sowell: Why President Obama is completely wrong on tax rates | New Hampshire OPINION02
This is something that has always bugged me. There are two obvious causes of our debt. By far and away, the number one cause is over spending. A secondary, lesser cause was the crash of 2008, which caused about a 10 percent drop in revenue. But that wouldn't have been a crisis except for the spending.
The Iraq war had almost nothing to do with the debt. The Afghan war had less, and in any case was strongly supported by most Democrats, including Pres. Obama. The Bush tax cuts had zero, zip, nada to do with it. When are we going to get some honesty about the national debt?
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A quick review of this piece reveals the crux of this author's fallacy.
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What both the statistical tables in the "Economic Report of the President" and the graphs in Investor's Business Daily show is that (1) tax revenues went up - not down - after tax rates were cut during the Bush administration, and (2) the budget deficit declined, year after year, after the cut in tax rates that have been blamed by Obama for increasing the deficit.
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In fact, tax revenues fell immediately after the cuts but rebounded a few years later during the housing bubble.
i addressed this very fallacy in this thread:
http://www.city-data.com/forum/27225099-post62.html
I couldn't have asked for a better example of Mr. Sowell's slight of hand. Economists know to adjust revenue over time for inflation and population growth, both of which increase government revenue regardless of tax policy. The deficit did decline during the housing bubble, that is true.
However, the
CBO forcasted that had taxes not been raised, the U.S. would have been running continuous surpluses -- paying off the entire debt by 2006.
The tax-cuts; the wars had much to do with the debt.
