This just in -- tax cuts stimulate

President starting to admit what conservatives knew all along

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President Obama oddly walked out on a press conference to tout his tax compromise with Republicans -- aloofly leaving the chore to former President Bill Clinton in order to attend a Christmas party.

It was a historically bizarre moment -- that a president attempting to sell what has become a signature legislative goal in the waning days of a congressional session would dodge out for a social occasion. There's a not-so-fine line between sanguine and out to lunch, and the president seems to have crossed it.

Perhaps he sensed the awkwardness of it all: the supposed great communicator having to use a surrogate to try to get what he wants from his own Democratic Party, while also having to make a stark admission that must have burned the tongue:

That tax cuts stimulate the economy.

That's right. He's finally admitted it.

Mr. Obama, in defending his compromise tax package against a Democratic Party revolt, acknowledged that a broad range of independent economists, from liberal to conservative, have said the package would increase economic growth by up to 1 percent -- and add as many as 1.5 million new jobs.

Undoubtedly, the president will take credit for all that, should it come to pass. But isn't he ceding a seminal point to his political opponents -- that smaller, i.e. less expensive, government is good for the economy?

History shows it also happens to be good for government: When presidents Kennedy and Reagan led moves to reduce taxes sharply, revenues to the government actually went up.

If all this is true, would not that approach have been superior all along to the government-centric "stimulus" bill that put us another trillion in debt and did next to nothing to stimulate the economy? Remember, that bill was supposed to prevent us from surpassing 8 percent unemployment -- yet, with it, unemployment has been closer to 10 percent.

Atlantic Monthly blogger Andrew Sullivan calls the tax package a "second stimulus." How can that possibly be? Don't tax cuts only "cost" the government money?

They do in the "mainstream" media's eyes. A national radio report Monday dutifully repeated liberal concerns that the tax compromise -- which would extend current tax rates for all Americans -- was "too generous" to the wealthiest Americans.

Too "generous"? So, when the government decides not to take our money, it's being "generous"? Is there a distinct problem of perspective in the national media?

And when will they acknowledge the president's sea change on the stimulative effects of tax cuts?

Comments (16) Add comment
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robaroo
884
Points
robaroo 12/13/10 - 10:50 pm
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0
Just how much evidence do you

Just how much evidence do you need to see that stimulus packages don't work? Thirty years of "stimulating" the economy has left the US trillions of dollars in debt and close to bankruptcy.

Look at the balance sheet - revenue goes up in the short term, but the debt crushes everything else. I think I heard that 40% of tax revenues go to servicing debt. Not building roads and dams, not going to social security or the military, not going to educations, not going to anything to help Americans. Just servicing the debt on borrowed money.

You can do this experiment at home. Ring up $20k on your credit cards. You get to have a big party this year as your revenue goes way up. But look at what it does for your finances in the long run.

Sorry, but stimulus without corresponding spending cuts devastates the US economy. Neither the Republicans or the Democrats have a clue about fiscal conservatism.

ReformedRepub
0
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ReformedRepub 12/14/10 - 03:39 am
0
0
The only thing that I have

The only thing that I have ever seen with tax cuts, including from the Reagan era, is the deficit grows, and the economy does into recessions. Tax increases, as in the George H W Bush administration, reduced the deficit and started a rebound of the economy. George W Bush cut taxes, and the economy tanked and the deficit grew by one trillion dollars with the stroke of a pen. BRILLIANT! Republicans, you WANT this so bad, you actually believe your lies.....

justthefacts
25475
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justthefacts 12/14/10 - 06:27 am
0
0
Cut taxes and spending.

Cut taxes and spending. Interesting concept.

ReformedRepub
0
Points
ReformedRepub 12/14/10 - 06:49 am
0
0
Eliminate the tax cuts,

Eliminate the tax cuts, reduce spending. When in financial trouble, one does NOT reduce his income, it's counter productive. It's been PROVEN to work, whereas, any other ideas have resulted in debacles in the economy. without trying to incite a flame war, please show me where reductions in taxes have reduced deficits, or have not resulted in recessions within two years.

bettyboop
8
Points
bettyboop 12/14/10 - 08:50 am
0
0
Yes it was bizzare to wach a

Yes it was bizzare to wach a President hand over his job to another ....surreal in fact....I think Fox put it best "barry outsources the Presidency".......it goes to show that this person had no idea what was in store for him and I believe he really thought he would spend the next four years just being idolized....well barry it would not surprise me if deep in the dark of night you and michelle and the younguns didn't pack up and head for Chi-town leaving a note scribbled ""we didn't sign up for this.. we quit!""............!.

seenitB4
98477
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seenitB4 12/14/10 - 09:14 am
0
0
Someone found out that being

Someone found out that being President isn't just giving pretty speeches...haha-----ole Clinton was a good one to hand to to though,, cause he could give a speech w/o reading every blessed word off of a machine.

justus4
113
Points
justus4 12/14/10 - 09:17 am
0
0
Not an original thought
Unpublished

Not an original thought anywhere...just repeating words. The President made a compromise with republicans which included tax cuts - HE DID NOT CHANGE HIS VIEWS ON TAXES!!!! In fact, he will be re-elected because the compromise extended the cuts for only TWO yrs. That brilliant move positions the CINC to have the exact same debate during the 2012 elections. Republicans will learn at that time just where Americans will tell them to stick their tax cuts for the rich. Again, great vision by this president in choosing his battles and outsmarting the "hostage takers." His compromise saved the American people. Great job!

nofanofobama
6993
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nofanofobama 12/14/10 - 10:14 am
0
0
what you all dont realize

what you all dont realize about tax cuts is that they are a temporary stimulus and do not carry over year after year after year...that why we call it a stimulus..if you look at the kennedy reagan and bush tax cuts and the following years the IRS revenues always goe up and then level off..thats because the stimulus works the first couple of years and the economy grows accordingly and then levels off for that stimuli and revenues go up to the treasury proportional to that stimuli..those who say it does not work look at it from the stand point that the revenues will grow the same amount each year...it doesnt work that way...unfortunately that group includes congress [both parties] they look at the additional revenue those first couple of years and spend hog wild that the rate of increase will be there always**it wont ..thats why we have a spending problem and not a tax problem...tax cuts are a stimulus to make consumers and business feel better and after all a recession is a of lack of confidence and feeling good about the future..that why tax cuts work..and in l business times of normal growth we dont need that stimulus...

southernguy08
532
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southernguy08 12/14/10 - 10:44 am
0
0
AC, haven't you heard?
Unpublished

AC, haven't you heard? According to that icon of intellect, Nancy Pelosi, unemployment checks and food stamps are what stimulates the economy. As for reducing spending, I agree. Let the lazy slobs getting welfare checks be the first to feel this new "guvmint" practice and you'll see the liberals advocating such make a quick about face.

Chillen
17
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Chillen 12/14/10 - 12:26 pm
0
0
Obama is making a pathetic

Obama is making a pathetic attempt to show he's compromising, probably at the moderate democrat's insistence (folks like Bill Clinton).

In reality though, this tax bill is loaded with extra spending - about $300 billion to be exact - all of which we will need to borrow from China or we can just print more funny money.

Part of the bill extends unemployment benefits. Again. I swear, as long as we pay people not to work, they won't! Yes, there are some good people unemployed but they are waiting for the "perfect" job, not just any job to make ends meet. I know second hand of someone here is Augusta who was laid off and has decided to stay home with the kids. She has NO INTENTION of going back to work but yet she takes her check each & every month. A win-win for her, that's for sure.

Worst President Ever. Making the worst of the terrible financial situation we are in. Rewarding non-productivity is his goal in life.

WoodyKaminer
2
Points
WoodyKaminer 12/14/10 - 12:56 pm
0
0
and when do we vote gain?

and when do we vote gain?

kmb413
533
Points
kmb413 12/14/10 - 01:45 pm
0
0
Why is this still being

Why is this still being called a 'tax cut'??? The current 'tax cut' has been the TAX RATE for the last 10 years!!! He did nothing new, the only thing he didn't do was RAISE taxes in January. Everything will stay the same (at least for the next 2 years). I don't see how that is going to stimulate anything.
Are businesses really going to hire now with uncertainty looming in 2012?

RoadKing09
16
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RoadKing09 12/14/10 - 02:04 pm
0
0
I guess if you watch you'll

I guess if you watch you'll see.

I C U 2
0
Points
I C U 2 12/14/10 - 04:00 pm
0
0
I don't believe we will see

I don't believe we will see businesses hiring until the democrats have been completely nullified. Too much risk otherwise. They shouldn't have tried to take over everything so fast, It woke the sleepers up. Big mistake. humongous mistake. gargantuan mistke. Who can save the day now ? Hillary ? Bill ? Who ?????

ReformedRepub
0
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ReformedRepub 12/14/10 - 04:41 pm
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0
KMB, it's called renewing the

KMB, it's called renewing the Bush tax cut, because it was not a permanent reduction in taxes, and was enacted in 2006, taking effect in '07, I believe. SO, if the TAX CUT that Bush and the Republicans FORCED through Congress, enlarging the deficit by 1 trillion dollars and helping to cause the dilemma we're in now, is not EXTENDED, the tax rate will go back UP to what it was in 06.

kmb413
533
Points
kmb413 12/14/10 - 05:07 pm
0
0
You are wrong. They were

You are wrong. They were enacted in 2001 and 2003!

"Although the cuts were large and drove revenue down sharply, they are not the main cause of the sizable deficit that exists today. In 2007, well after the tax cuts took effect, the budget deficit stood at 1.2 percent of GDP. By 2009, it had increased to 9.9 percent of the economy. The Bush tax cuts didn't change between 2007 and 2009, so clearly something else is to blame."

http://www.washingtonpost.com/wp-dyn/content/article/2010/07/30/AR201007...

kmb413
533
Points
kmb413 12/14/10 - 05:08 pm
0
0
How could the Republicans

How could the Republicans have forced it through in 2006 when the Democrats were in control then?

ReformedRepub
0
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ReformedRepub 12/14/10 - 06:33 pm
0
0
You may be correct about the

You may be correct about the year, Kmb, apologies.

SoonerorLater
0
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SoonerorLater 12/14/10 - 07:07 pm
0
0
The article clearly states

The article clearly states that when Kennedy and Reagan cut taxes, revenues went up. ReformedRepublican seems to have passed over that paragraph and still says that revenues drop. Tax cuts stimulate the economy, put people to work, who are able to spend money, thus generating more taxes. RR seems to view this in a vacuum that if you cut taxes, all esle remains equal, thus revenues are cut. He/She fails to consider that the tax cuts stimulate the economy, thus adding more people to the tax rolls since they work and pay taxes.

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