Nothing to See Here

Via Mark Thoma and Brendan Nyhan another one of those uninfluential supply-siders carefully kept at the margins of the policy process by the leaders of the Republican Party:

I would also argue that cutting taxes made a significant difference, not only in dealing with a recession and an attack on our country, but it also made a significant difference in dealing with the deficit because the growing economy yielded more tax revenues, which allowed us to shrink the deficit.

No. Wait. That was the President of the United States.

Comments

Re "because the growing economy yielded more tax revenues, which allowed us to shrink the deficit"
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So why don't the morons in the mainstream media point out that (a) Much of the capital freed up by Bush's tax cut went to grow the economy in CHINA (look at US foreign direct investment vs US business investment) and (b) the federal debt is almost $4 TRILLION more than what Bush said it would be just a few years back

The only way I can understand the pass that MSM reporters give Bush is that drunks have sympathy for the incompetence of fellow drunks.

Posted by Don Williams | September 20, 2007 11:04 AM

Look, this whole situation really isn't so totally inexplicable...

These days, the owners of the major media outlets are all *billionaires*. They certainly benefit from huge tax cuts, especially in the Capital Gains and Estate Tax categories.

And the leading employees of the major media outlets are mostly multimillionaires (e.g. Dan Rather earned $8M/year and Peter Jennings's estate was worth $50M). They also certainly benefit from the same huge tax cuts.

It's hardly completely astonishing that policies which heavily benefit a particular group while probably harming the society at a whole are supported (or at least not sharply attacked) by most members of that particular group.

Posted by RKU | September 20, 2007 11:14 AM

Ah , yes. This just in from http://news.yahoo.com/s/ap/20070920/ap_on_go_pr_wh/bush

"WASHINGTON - President Bush on Thursday cited "some unsettling times" in the U.S. housing and credit markets as he sought to assure jittery Americans that the economy basically is in good shape despite worries about a recession.

'I say that the fundamentals of our nation's economy are strong,' Bush told a White House news conference."
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ha ha ha
If you are in Manhattan, keep an eye up overhead if you walk down Wall Street. I suspect The brokers are about to start jumping out of the windows.

Posted by Don Williams | September 20, 2007 11:24 AM

I TOLD you people a shitstorm was coming back in Dec 2006. My post From http://matthewyglesias.theatlantic.com/archives/2006/12/the_sweet_sweet_fed.php#comment-119132
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Ah, Matthew. You don't realize the evil genius of Karl Rove.

When the bill for 6 years of corruption, venality, and economic incompetence comes due, someone has to be the designated scapegoat. And if Nancy Pelosi doesn't make sure that it's the Republicans, then it's going to be her.

The Republicans are handing the incoming giddy Democrats a big brown bag of cat manure called an "inverted yield curve."

It's the Fed's job to now make sure that bag bursts.

The MOST reliable predictor of a recession is the yield curve. Normally, long term Treasuries sell at interest rates well above rates paid on short term bills. When the yield curve inverts -- i.e. interest on short term bills rises above
that on long term bond -- then a recession follows in 8-12 months. The likelihood of recession increases as the inversion gets steeper.

The latest yield curve model --developed by Fed researcher Jonathan Wright -- indicates a probability of recession within 12 months to be around 47% --very high by historical standards.
An earlier model by Fed Researcher Estrella puts the probability at around 41%. If the Fed raises the federal funds rate yet again, recession will become a certainty.

Just in time for the 2008 campaign.

See http://www.econbrowser.com/archives/2006/04/the_yield_curve.html --note that this article dates from April 2006 and that the yield curve is now much worst and the federal funds rate much higher. You can compute today's odds --using today's interest rates -- here: http://politicalcalculations.blogspot.com/2006/04/reckoning-odds-of-recession.html "
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3 more months and I'll be posting "I told you so"

Posted by Don Williams | September 20, 2007 11:26 AM

Wait a sec: what deficit has shrunk? Where?

I mean, he's entitled to his opinions, but not to his facts.

Posted by El Cruzado | September 20, 2007 11:33 AM

This is, of course, a total lie, as a Post reporter (but not the headline writer!) noted a while back:

"Federal revenue is lower today than it would have been without the tax cuts. There's really no dispute among economists about that," said Alan D. Viard, a former Bush White House economist now at the nonpartisan American Enterprise Institute. "It's logically possible" that a tax cut could spur sufficient economic growth to pay for itself, Viard said. "But there's no evidence that these tax cuts would come anywhere close to that."

Economists at the nonpartisan Congressional Budget Office and in the Treasury Department have reached the same conclusion. An analysis of Treasury data prepared last month by the Congressional Research Service estimates that economic growth fueled by the cuts is likely to generate revenue worth about 7 percent of the total cost of the cuts, a broad package of rate reductions and tax credits that has returned an estimated $1.1 trillion to taxpayers since 2001.

Robert Carroll, deputy assistant Treasury secretary for tax analysis, said neither the president nor anyone else in the administration is claiming that tax cuts alone produced the unexpected surge in revenue. "As a matter of principle, we do not think tax cuts pay for themselves," Carroll said.

Posted by Elvis Elvisberg | September 20, 2007 12:06 PM

We don't need to be concerned at George Gilder and his (waning) influence on a handful of republicans. Really though, when you look at the facts objectively, you can't say that supply siders have much influence on Republican policies, if any at all.

Posted by mickslam | September 20, 2007 12:23 PM

"nonpartisan American Enterprise Institute"

WTF?

Posted by Reality Man | September 20, 2007 1:20 PM