Monday, September 10, 2018
In a letter by Mr. "Doc" Crawford on Sept. 2, he disputes my assertion that tax cuts do not cause recessions. He claimed they did in a letter of his back on Aug. 4.
I stand by my assertion in my earlier letter of Aug. 12 and provided facts to back it up.
Yes, Mr. Crawford, our accounts of American history do seem to differ. Most economists worth their salt agree that tax cuts tend to have a stimulative effect on the economy and the present day economy seems to confirm that. Granted, other factors like deregulation have contributed, as well. If they have a stimulative effect on the economy, how does that equate to a recession? Answer: It doesn't. It didn't after the JFK tax cuts and it didn't after the Reagan tax cuts, Bush the second, not as much, but the hangover from 9/11 and a recession that started at the end of Clinton's term had something to do with that.
Economic booms occurred after each of the JFK and Reagan cuts. The tax cuts also increased Treasury revenues after about two years, which the IRS tables show. BTW, yes, Reagan did raise some miscellaneous taxes (gas tax, etc.), but not the federal income tax as you tried to assert in your letter.
Mr. Crawford also mentioned the economy under Bill Clinton. I will agree with him that Clinton compromising with Newt Gingrich and the GOP certainly helped provide a stable and healthy economy during that time, but also a major contributing factor was the technology boom and the advent of computers and the internet. All this brought in an increase of federal revenue and that, along with the dramatic in defense spending, did provide a surplus. Too bad under today's political environment, compromise seems to have gone by the wayside.
Yes, Mr. Crawford, the facts have been recorded, and possibly any bias you have affected your interpretation. Again, there is no evidence that tax cuts have ever been the direct cause of recessions.
Hot Springs VillageEditorial on 09/10/2018
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