Pawlenty's economic plan seeks 5 pct annual growth (interstate, regular, downturn)

[hotair2]

Originally Posted by pghquest

Um, Gregory Mankiw supported the Bush tax cuts

He also opposes estate taxes.

I bet you come back and tell me no one cares what he thinks.. haha

You seem to be confused and apparently are causing yourself a lot of pain by your continual slapping of your head.

Let me ease your burden by framing the argument an easier way. What we are saying is that tax cuts do not increase revenues. O.K. Do you have that. Of course, Mankiw supported Tax cuts, but not because he believed it increased revenue. Whether tax cuts increase economic growth is another question, with a different answer...it depends.

The whole Republican plan since Reagan has been to reduce taxes to starve the beast...govt. Of course, that has not worked out very well, while taxes have gone down the deficit (govt. spending) has gone up.

If you feel the need to slap yourself again, please do, but I am starting to feel sorry for you. It must really hurt.

[robbobobbo]

From a fact check in today's Washington Post:

Pawlenty’s goal of 5 percent annual growth in the gross domestic product strikes us as rather ambitious. He essentially admits this when he notes that Ronald Reagan achieved 4.9 percent growth between 1983 and 1987 and that Bill Clinton achieved 4.7 percent growth between 1996 and 1999. Both of those results came after recessions. Pawlenty, who proposes dramatic cuts in taxes, does not note that Clinton’s stellar economic performance was achieved even though he raised taxes on the wealthy.

Pawlenty also makes 5 percent growth seem achievable by lumping together the best years. When the individual years during each man’s presidency are examined, this goal seems even less realistic.

Reagan’s GDP growth per year: –2.0%, 4.3%, 7.3%, 3.8%, 3.4%, 3.4%, 4.2% and 3.5% (average of 3.5 percent).

Clinton’s GDP growth per year: 4.0%, 2.7%, 3.6%, 4.4%, 4.2%, 4.9%, 3.8% and 0.3% (average of 3.5 percent).

Indeed, when Bob Dole ran for president as the Republican nominee in 1996, he had a more modest goal than does Pawlenty: “Bob Dole believes the economy can grow at an annual rate of 3.5 percent. And he will implement a plan to achieve this goal.”

The last president to achieve consistent growth above 5 percent was John F. Kennedy a half-century ago, when the baby-boom generation was on the verge of entering the workforce. Now, that generation is heading into retirement, leaving fewer workers to carry the burden.

Simply on the basis of economics, Dole had what seems like a reasonable objective — and Pawlenty is close to not passing a laugh test, especially if he also proposes to slash the federal budget and taxes.

The Pawlenty campaign says that he assumes federal revenue will return to its historic average of around 18 percent of GDP, even with his lower rates and elimination of key taxes, because “this has generally been the case regardless of higher or lower revenues. With lower rates, we will have a higher rate of tax compliance and increased revenue due to increased growth.”

Maybe it is just a coincidence, but after the Reagan and George W. Bush tax cuts, tax receipts as a percentage of GDP dropped well below 18 percent, even as low as 16 percent. In 2010, tax revenues were below 15 percent of GDP, so there is a steep hill to climb to get back to 18 percent.

In this speech, Pawlenty pushed the envelope to make eliminating the budget deficit and boosting the economy sound much too easy, while relying on some dubious facts and assertions.

Tim Pawlenty’s dubious economic assertions - The Fact Checker - The Washington Post

[JazzyTallGuy]

Originally Posted by Glitch

That is only necessary when there is absolutely no leadership coming from the White House. As I previously posted, President Reagan was able to get a Democrat controlled House to support his proposed tax cuts, and he could only have done that through effective leadership.

I am not suggesting that former Governor Pawlenty has the leadership skills necessary to convince the House of anything, regardless of which party is in control. I am merely stating that the only way a President, any President, can get their agenda through Congress is through effective leadership. Either the President controls the national agenda, or Congress will by default.

You seem to forget that during the 1980's there was still such a thing as a moderate Republican or moderate Democrat and a spirit of compromise in both the Senate and House were people on both sides of the aisle were able to cut deals to get things done.

Cut to thirty years later where you have the Republican Speaker of the House saying 'No Compromise" and the Republican Senate Majority Leader saying "Our objective is to make Barack Obama a one term president".

Sorry but while both sides are more extreme than in the 1980's the Republican Party has consistently shown over the past several years an unwillingness to compromise even for the overall good of the American people.

Also Pawlenty has NOTHING in his record that indicates he's a consensus builder or capable of bi-partisan comprosmise.

[pghquest]

Originally Posted by MTAtech

Your graph is from U.S. Budget and Economy

the caption under the graph you linked says it all:

If you think that says it all, then you have very low standards. Are you really going to tell me that 2007-2009 are "normal" economic years? Please get real.. revenues are down because GDP is down, and GDP is down because we're in a recession.

Originally Posted by MTAtech

You are missing the point. You attribute increased GDP activity to the taxcuts -- as a causal relationship that can't be proved. Your own link shows that GDP increase was historically small and federal revenue was unimpressive over that period. The fact that GDP rose is not exceptional. GDP rises over time regardless of policy just because of population growth. The fact that the growth from 2003-2006 wasn't much, is what's telling.

Arent you one of those posters celebrating the growth in GDP currently going on, even though its "relatively small", and unimpressive?

Again, for the last SEVENTY YEARS, revenues to the federal government have been relatively consistant, about 18% of the GDP.. Are you going to tell me that 70 years isnt a relevant timeline to compare the cause and effects of tax rates? We've gone through periods of time that had very very high taxes, and very very low taxes, and yet the tax revenues have remaind the same compared to the GDP. If you want to increase revenues you increase GDP.. you dont starve the economy by draining it and then expect people to take opposite reactions that they've done for 70 years..

[Glitch]

Originally Posted by JazzyTallGuy

You seem to forget that during the 1980's there was still such a thing as a moderate Republican or moderate Democrat and a spirit of compromise in both the Senate and House were people on both sides of the aisle were able to cut deals to get things done.

The only "compromise" going on during the 1980s was President Reagan promising not to veto the Democrat's budget if they gave him his tax cuts and increases in military spending. The Democrats, guaranteed the budget would get the Presidents signature, added on more than a 400% increase in social spending. That is how we managed to go from $1 trillion in debt to $4.2 trillion in debt from 1981 through 1989. In the 8 years President Reagan held office, he only vetoed two budgets. Once, shutting down government in 1984 in order to lower congressional spending.

Originally Posted by JazzyTallGuy

Cut to thirty years later where you have the Republican Speaker of the House saying 'No Compromise" and the Republican Senate Majority Leader saying "Our objective is to make Barack Obama a one term president".

Speaker Boehner did indeed say that he would not compromise, but did precisely that when he gave Democrats $120+ billion in new spending for fiscal year 2011 in order to secure their vote to extend the 2001 tax cuts. It took the Speaker all of 21 days to break his vow of "No Compromise."

Originally Posted by JazzyTallGuy

Sorry but while both sides are more extreme than in the 1980's the Republican Party has consistently shown over the past several years an unwillingness to compromise even for the overall good of the American people.

Neither political party are any more or less extreme than they were in 1980s, or even the 1960s. They have just become more nefarious. When the GOP controlled Congress from 1995 through 2001, there was certainly no compromising with the Democrats. If you recall, Clinton shut down the government in 1995 after vetoing three separate GOP budgets. Unlike Reagan, who shut down government because Congress was spending too much, Clinton shut down government because he felt Congress was not spending enough.

Originally Posted by JazzyTallGuy

Also Pawlenty has NOTHING in his record that indicates he's a consensus builder or capable of bi-partisan comprosmise.

I disagree. As Governor he was able to get what he wanted from the Democrat controlled state legislature by letting them have what they wanted. As what happened under President Reagan, government spending soared along with the state deficit, but he did demonstrate a willingness to compromise and gain a consensus.

[EinsteinsGhost]

Originally Posted by pghquest

So again, you are claiming the CBO is wrong?

Did I? Read my post.

Originally Posted by pghquest

It shows the same thing.. That revenues have remained consistant within a few % points regardless of the tax rate..

The difference between your chart and the one provided by Hotair2 is in amount of information as well as the scale. The latter ends up being too kind to properly demonstrate the debacle that tax cuts introduced to tax receipts. Hotair2's chart has two additional pieces of information, an average for receipts over four decades, as a percentage of GDP and the same for outlays.

Originally Posted by pghquest

1- The 1981 tax cuts, didnt kick in until 1982
2- and the cuts actually increase the nations GDP, reversing a downward trend due to a recession.

1- Which (partly) explains why tax revenue declined from $1.25 Trillion in 1981 to $1.20 Trillion in 1982 to $1.13 Trillion in 1983 (the same receipt was recorded five years earlier, in 1978) and was $1.17 Trillion in 1984 (less than $1.19 Trillion in 1979).

2- Using 1981 as a baseline, GDP grew by 6% over three years (1982, 1983 and 1984) while tax revenue was 6% below its previous peak. With higher taxes under Clinton, 7% growth in GDP was achieved in just two years (1993, 1994) while tax receipts grew by 10%.

Originally Posted by BucsLose

Kinda like the media and libs did with Obama?

I can't speak for others, but I see more right wingers subscribing to the idea than on the left. And now, they aren't just pointing fingers, they are actually singing the tune for their own choice.

[MTAtech]

Originally Posted by pghquest

If you think that says it all, then you have very low standards. Are you really going to tell me that 2007-2009 are "normal" economic years? Please get real.. revenues are down because GDP is down, and GDP is down because we're in a recession.

Arent you one of those posters celebrating the growth in GDP currently going on, even though its "relatively small", and unimpressive?

Again, for the last SEVENTY YEARS, revenues to the federal government have been relatively consistant, about 18% of the GDP.. Are you going to tell me that 70 years isnt a relevant timeline to compare the cause and effects of tax rates? We've gone through periods of time that had very very high taxes, and very very low taxes, and yet the tax revenues have remaind the same compared to the GDP. If you want to increase revenues you increase GDP.. you dont starve the economy by draining it and then expect people to take opposite reactions that they've done for 70 years..

You were making the case that cutting taxes improves revenue and GDP. A review of the two tax-cutters Reagan and Bush (even though Reagan reversed himself when the 1981 tax-cuts plummeted revenues), reveals that periods following tax-cuts under perform the non-tax-cut periods, period. Additionally, tax revenue falls following periods after the tax-cuts, adjusting for inflation and population growth.

Regarding, "Are you really going to tell me that 2007-2009 are "normal" economic years?" That is cherry picking. The period of time mentioned was 2001-2009, and you know it.

[Glitch]

Originally Posted by MTAtech

You were making the case that cutting taxes improves revenue and GDP. A review of the two tax-cutters Reagan and Bush (even though Reagan reversed himself when the 1981 tax-cuts plummeted revenues), reveals that periods following tax-cuts under perform the non-tax-cut periods, period. Additionally, tax revenue falls following periods after the tax-cuts, adjusting for inflation and population growth.

Regarding, "Are you really going to tell me that 2007-2009 are "normal" economic years?" That is cherry picking. The period of time mentioned was 2001-2009, and you know it.

During times of economic downturns, a.k.a. recessions, the economy needs money to recover. By taking money out of the economy the government prolongs the economic downturn. A reduction in taxes will obviously lower government revenues in the short term, but an influx of money from less taxes will help the economy begin to recover. How quickly the economy recovers is dependent upon how much money is available.

Before the government can see an increase in revenues, after a tax cut, the economy must be performing better than what it was when government revenues were at its peak before the tax cut. That could take as little as a year or two, or it could take longer. Again, it depends on the amount of money available in the economy.

Increasing taxes will certainly increase government revenues, in the short term. However, as the government takes more money out of the economy they risk making the economic downturn even worse. Which would result in lower government revenues, despite the tax increase.

[JazzyTallGuy]

Originally Posted by Glitch

In 2001 there was a 5% real growth rate in the GDP, but otherwise you are correct. The "booming" economy (5% or better real growth rate in the GDP) of the 1990s was a liberal myth. It never happened. The last booming economy was the mid- to late-1980s, as you pointed out. Prior to that, we had a booming economy from 1945 through 1949, then the Korean War began in 1950.

Well conisdering what we had duing the Bush 43 administration the Clinton Adminstration was better by just abouit any economic criteria that you would want to use when compared to the Bush 43 administration.


Here is year over year average quarterly GDP for each two term presidential administrations going back to Eisenhower based on Bureau of Economic Analysis stats:

Bush 43 - 2.075%

Clinton - 3.86875%

Reagan - 3.403125%

Nixon-Ford - 2.803125%

Kennedy-Johnson - 4.8625%

Eisenhower - 3.00625%

The Bush 43 adminstration could only get quarterly GDP growth of 4% or better TWICE, compared to TWENTY times for the Clinton administration, FIFTEEN times for the Reagan administration, THIRTEEN times for the Nixon-Ford adminstration, TWENTY THREE times for the Kennedy-Johnson adminstration and TWELVE times for Eisenhower adminstration.

The Bush 43 administration basically used the "Trickle Down Economics" playbook to a tee, low taxes, less government regulation, and accomodating monetary policy by the FED and it got use the THE WORST ECONOMIC TWO PRESIDENTIAL ADMINISTRATION POST WORLD WAR II.

TRICKLE DOWN ECONOMICS IS A FAILURE!

Pawlenty offers only more of the same.

On another note anybody that has down any research in terms of economic growth KNOWS how hard it is to get 5% GDP growth on a continuous basis in an economcially developed country. The very fact that Tim Pawlenty would make this type of assertion stretchs his credibility and when combine it with his fiscal record in Minnesota his credibility goes out the damn window.

[EinsteinsGhost]

Originally Posted by Glitch

During times of economic downturns, a.k.a. recessions, the economy needs money to recover. By taking money out of the economy the government prolongs the economic downturn.

Opposite to that would be government putting money into the economy.