If lowering federal income tax rates were so good, why ware real wages and growth rates so dismal compared?

Question

to Pre-Reagan days? Why was Bush's average growth rate and job creation so enemic - even excluding his last recession?

Isn't there something fundamentally wrong with Republican economics?

Answer 1

Nope! I can tell you this from doing a thesis on Tax rates and how they affect the economy.



EVERY time it's done, the economy has improved, sometimes faster than others. When John Kennedy lowered taxes in the 60's, the economy was great! When Ronald Reagan cut taxes in the 80's, we had the 80's boom.



The theory is pretty simple: and I do urge you to do some research and find out for yourself:

If the government cuts your taxes, you have more money (it's yours anyway!) to spend. You spend it in businesses in your area, and they prosper. If they prosper, they can buy more supplies, they can hire people, etc. Trickle Down Economics works! It works every time it's tried.



The killing thing about taxes is, too many people are mooching off the government and the money they take from you and I is never ending. Some programs need to be cut, i.e. NEA (not in the constitution) or funding for NPR (not in the constitution) and cutting stuff like building tunnels for turtles or studying the sex habits of frogs! All of that kind of stuff is stuff that the government has no business being involved in.



So, since NObama has been in charge, there have been no tax cuts. What the repubs want is to simply EXTEND the current tax cuts that the Bush Admin. brought about. Not even LOWERING taxes, but just extending what is already set to expire in January 2011. If those tax cuts are allowed to expire, EVERYONE's taxes go up, therefore less money for you and me. Do you want that?

Didn't think so.



And also, this nonsense about 'tax cuts for the wealthy' is hogwash. The so called "wealthy" in this country pay more than 98% (not exactly sure but high 90"s) of all taxes. The lower economic scales PAY NONE. People who are 'wealthy' are the people who create jobs, for heavens sake. If the gov. keeps taking more and more of their money, the won't be able to spend, or hire people or whatever.

Answer 2

It's pointless trying to explain it to you. I'll just give you a New York Times source, which states: "MIGHT TAX CUTS BE MORE POTENT? Textbook Keynesian theory says that tax cuts are less potent than spending increases for stimulating an economy. When the government spends a dollar, the dollar is spent. When the government gives a household a dollar back in taxes, the dollar might be saved, which does not add to aggregate demand. The evidence, however, is hard to square with the theory. A recent study by Christina D. Romer and David H. Romer, then economists at the University of California, Berkeley, finds that a dollar of tax cuts raises the G.D.P. by about $3. According to the Romers, the multiplier for tax cuts is more than twice what Professor Ramey finds for spending increases. "

Answer 3

Well, yes; we've spent nearly three decades using the entire system of taxation and government finance to concentrate wealth in fewer hands. A whole lot of this comes from deficit spending, because every nickel the government spends goes into someone's pocket--and a whole lot of people who didn't get any are getting handed the debts to pay off. (And guess who collects most of the interest, too?)



The thing about people with lots of money is that they aren't as motivated to keep it circulating. The result is an economy headed more and more toward being the Last Banana Republic: lots of people working for the wealthy, and lots more out of work, and most of them economizing to the point where small business can't build a decent customer base.



Without fully reversing the trend, we proved in the '90s that even if we reduced it a bit, everybody (including the wealthy) benefited. We had the biggest boom in history. The wealthy got upset that life wasn't nasty for most people, which meant that they weren't as special any more, so they backed a candidate who promised to return us to the mess, only more so. And delivered on that promise, too; the near-wreck of the economy was predictable from Bush's campaign speeches in 2000. (I know; I predicted it.)



The thing is, the use of the whole government to concentrate wealth means most people are in fact overtaxed compared to what they get from the government. It turns out to be easy to promise them tax cuts, and they'll ignore the fact that the benefits of those tax cuts go almost entirely to the wealthy. The TEA (as in "Taxed Enough Already) Party has everything right except for figuring out who's responsible and how it could be fixed: they're mad about the right things, just picking the wrong solutions.



The silliest part of this is the anointing of Richard Armey as a great deficit hawk. In the mid-'90s, he made speeches about the horror of Clinton's "spiraling surpluses." At that point the Clinton administration barely threatened to put a tiny dent in the piled-up debt from the Reagan-Bush era. Richard Armey was already demanding a return to the pattern of increasing deficit spending forever, with no plan to ever get out of the debt.



What's beneath this is the discovery that economics is just complicated enough that people will believe almost anything you say about it, so you can just lie about what makes sense. If it sounds stupid, they'll just believe that's the way economies work.

Answer 4

Nope, you are only looking at one part of the whole. Another part is the fact that the cost of goods was going down during this same period so wages have to track the cost of goods. As the cost of goods goes up, wages go up like they did from the 1940's through into the 1970's. Also, you forget to factor in the shift from higher paying manufacturing jobs to lower paying service jobs.

Answer 5

Peoples income was better in teh 50's because we had a huge trade surplus from when world war 2 destroyed all factories, except those int eh US. SO if someone had to buy a manufactured goods, tehy have to buy Americans. Because Eisenhower help rebuild Japan and Germany, they were able to compete against US in the 70's.

Answer 6

the income of americans started dropping seriously in the late 60's and early 70's. thats when the EPA was created, OSHA was created, the war on poverty, gasoline regulations, the great society, the civil rights act, the consumer product safety commission, wage and price controls, the war on drugs and many other government programs were created that tinkered with the economy. somehow i dont think its a coincidence.

Answer 7

The federal income tax cuts were good for the economy. Expanding free trade agreements to Asia and deregulating the financial industry were not. Instead of stimulating economic growth in our country, Bush and the Republicans mostly stimulated economic growth in China and India. America just got the biggest stock market bubble based on worthless stocks in our history.

Answer 8

All these cuts lead to only more money in the pockets of greedy, spoiled, fat Cats. It trickles no where. any person that is poor, Middle class, minority or Female that vote for a Republican is a dam fool, Period.

Answer 9

The more illegals the lower the wages the less $ U have simple logic.

Answer 10

Money As Debt

http://www.youtube.com/watch?v=vVkFb26u9g8

Answer 11

Unemployment was 5% in 2007....then the Dems took over.

Why don't you define "real wages".