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Critics tirelessly contend that America's swing from budget surpluses in 1998–2001 to a $247 bil­lion budget deficit in 2006 resulted chiefly from the "irresponsible" Bush tax cuts. This argument ignores the historic spending increases that pushed federal spending up from 18.5 percent of GDP in 2001 to 20.2 percent in 2006.[4]

Critics tirelessly contend that America's swing from budget surpluses in 1998–2001 to a $247 bil­lion budget deficit in 2006 resulted chiefly from the "irresponsible" Bush tax cuts. This argument ignores the historic spending increases that pushed federal spending up from 18.5 percent of GDP in 2001 to 20.2 percent in 2006.[4]

[[Image:Chart1 lg.gif|thumb|left|300px]]

[[Image:Chart1 lg.gif|thumb|right|300px]]

The best way to measure the swing from surplus to deficit is by comparing the pre–tax cut budget baseline of the Congressional Budget Office (CBO) with what actually happened. While the January 2000 baseline projected a 2006 budget surplus of $325 billion, the final 2006 numbers showed a $247 billion deficit—a net drop of $572 billion. This drop occurred because spending was $514 bil­lion above projected levels, and revenues were $58 billion below (even after $188 billion in tax cuts). In other words, 90 percent of the swing from surplus to deficit resulted from higher-than-projected spending, and only 10 percent resulted from lower-than-projected revenues.[5] (See Chart 1. [http://www.heritage.org/Research/Taxes/bg2001.cfm]

The best way to measure the swing from surplus to deficit is by comparing the pre–tax cut budget baseline of the Congressional Budget Office (CBO) with what actually happened. While the January 2000 baseline projected a 2006 budget surplus of $325 billion, the final 2006 numbers showed a $247 billion deficit—a net drop of $572 billion. This drop occurred because spending was $514 bil­lion above projected levels, and revenues were $58 billion below (even after $188 billion in tax cuts). In other words, 90 percent of the swing from surplus to deficit resulted from higher-than-projected spending, and only 10 percent resulted from lower-than-projected revenues.[5] (See Chart 1. [http://www.heritage.org/Research/Taxes/bg2001.cfm]

:From an conservative economic standpoint, Bush still deserves mediocre or poor grades. It's true that the budget is Congress' department, but has Bush done anything to curb spending and cut down on pork? Did he ever use his veto as Reagan did? while we can start to shift some of the blame to the Democrats now, we can't escape the fact that for six years republicans controlled both Congress and the White House, and it during that time that these deficits emerged. The sad fact is that politicians love to spend other peoples money. even those who rail against it tend to change their tune when its their turn. Clinton was lucky that he had surpluses during his tenure. Bush doesn't have the tech bubble, and Clinton didn't have a war on terror, even though after the World Trade center and embassy bombings he really should have. Bush is in a more difficult situtation, but the inabaility of ALL partys to curb spending is shameful. as for whether or not the bush tax cuts substantially desreased revenue, I guess it depends on what one considers substantial. is 58 billion substantial? I guess in this context it isnt so much, but considering 58 billion an unsubstantial amount of money is one reason why there is so little fiscal responsibility today. as for the point below, yes the tax cuts did help the economy, as they generally do. The deficits are still troubling, though. does no one remember those hopeful days in 1994 when Republicans talked of not just a balanced budget, but a balanced budget amendment? Why does no one even mention the term balanced budget or fiscal responsibility any more? [[User:AuH2O|AuH2O]]

:From an conservative economic standpoint, Bush still deserves mediocre or poor grades. It's true that the budget is Congress' department, but has Bush done anything to curb spending and cut down on pork? Did he ever use his veto as Reagan did? while we can start to shift some of the blame to the Democrats now, we can't escape the fact that for six years republicans controlled both Congress and the White House, and it during that time that these deficits emerged. The sad fact is that politicians love to spend other peoples money. even those who rail against it tend to change their tune when its their turn. Clinton was lucky that he had surpluses during his tenure. Bush doesn't have the tech bubble, and Clinton didn't have a war on terror, even though after the World Trade center and embassy bombings he really should have. Bush is in a more difficult situtation, but the inabaility of ALL partys to curb spending is shameful. as for whether or not the bush tax cuts substantially desreased revenue, I guess it depends on what one considers substantial. is 58 billion substantial? I guess in this context it isnt so much, but considering 58 billion an unsubstantial amount of money is one reason why there is so little fiscal responsibility today. as for the point below, yes the tax cuts did help the economy, as they generally do. The deficits are still troubling, though. does no one remember those hopeful days in 1994 when Republicans talked of not just a balanced budget, but a balanced budget amendment? Why does no one even mention the term balanced budget or fiscal responsibility any more? [[User:AuH2O|AuH2O]]

 

''"The claim that the Bush tax cuts have not helped the economy..."''

''"The claim that the Bush tax cuts have not helped the economy..."''

The 2003 tax cuts lowered income, capital gains, and dividend tax rates. These policies were designed to increase market incentives to work, save, and invest, thus creating jobs and increas­ing economic growth. An analysis of the six quarters before and after the 2003 tax cuts (a short enough time frame to exclude the 2001 re­cession) shows that this is exactly what hap­pened (see Table 3):

The 2003 tax cuts lowered income, capital gains, and dividend tax rates. These policies were designed to increase market incentives to work, save, and invest, thus creating jobs and increas­ing economic growth. An analysis of the six quarters before and after the 2003 tax cuts (a short enough time frame to exclude the 2001 re­cession) shows that this is exactly what hap­pened (see Table 3):

[[Image:Table 3 lg.gif|thumb|left|300px]]

[[Image:Table 3 lg.gif|thumb|right|300px]]

* GDP grew at an annual rate of just 1.7 percent in the six quarters before the 2003 tax cuts. In the six quarters following the tax cuts, the growth rate was 4.1 percent.

* GDP grew at an annual rate of just 1.7 percent in the six quarters before the 2003 tax cuts. In the six quarters following the tax cuts, the growth rate was 4.1 percent.

*  Non-residential fixed investment declined for 13 consecutive quarters before the 2003 tax cuts. Since then, it has expanded for 13 consec­utive quarters.

*  Non-residential fixed investment declined for 13 consecutive quarters before the 2003 tax cuts. Since then, it has expanded for 13 consec­utive quarters.

--<font color="#1E90FF" face="Comic Sans MS">[[User:TK|şŷŝôρ-₮K]]</font>^{<font color="DC143C">[[User_Talk:TK|Ṣρёаќǃ]]</font>} 07:55, 24 September 2007 (EDT)

--<font color="#1E90FF" face="Comic Sans MS">[[User:TK|şŷŝôρ-₮K]]</font>^{<font color="DC143C">[[User_Talk:TK|Ṣρёаќǃ]]</font>} 07:55, 24 September 2007 (EDT)

Although I would readily agree that sometimes tax cuts can be great for an economy - a budget deficit is most certainly not. Bush's irresponsible 'spending without raising' policies have led to the current deficit, something which is helping fuel the economies of the likes of Saudi Arabia, Japan etc. who are buying your government bonds to help make ends meet! Its a nasty little circle. Your charts were lovely though :-) [[User:Graham|Graham]] 09:55, 24 September 2007 (EDT)

:Although I would readily agree that sometimes tax cuts can be great for an economy - a budget deficit is most certainly not. Bush's irresponsible 'spending without raising' policies have led to the current deficit, something which is helping fuel the economies of the likes of Saudi Arabia, Japan etc. who are buying your government bonds to help make ends meet! Its a nasty little circle. Your charts were lovely though :-) [[User:Graham|Graham]] 09:55, 24 September 2007 (EDT)