An Economics Lesson…Again

by Ryan on July 11, 2006

in Politics

Every 20 years or so, our liberal friends have to relearn the same lesson: cutting taxes actually increases revenue to the federal government. Bush schooled them again today.

However, the deficit still exists– we are fighting a war on three fronts (Afghanistan, Iraq, and through clandestine and more direct intelligence gathering/sharing worldwide), dealing with inflationary pressure due to the price of oil, recovering from a dozen hurricanes including Katrina’s aftermath which left an unprecedented swath of destruction over an area the size of Great Britain, dealing with a Congress who loves to spend, and funding entitlements that we cannot sustain. And still the deficit is down over $120 billion under White House projections, meaning that the deficit is only 2.3% of GDP– how many of us can claim we’re only 2.3% in debt versus what we earn, produce and provide?

JFK did it in the 1960s, Ronald the Great in the 1980s, and now Dubya in the 2000s. Each time taxes were meaningfully cut the economy was stimulated leading to a boom each time. Trust the American people to use their money wisely and they will, with great results. Why can’t our liberal friends accept this lesson, having occurred three times during many of their own lives? Why is the answer always raise taxes to shore up budget gaps? It’s never cut spending, it’s always raise taxes (take New Jersey for example). I learned this simple tax cut, supply-side principle in Macroeconomics 202 with Dr. Khalil back in college. It’s not that difficult unless, of course, your econ classes came with Kool-Aid.

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