Tuesday, August 10, 2010

Nearly ALL of our budget deficits come not from reduced tax revenues, but from spending increases

[...] One liberal writes that "the government actually ran a surplus during the Clinton administration's last few years, and it was former President George W. Bush's wars and tax cuts for the rich that turned our federal budget into the red." This is typical liberal thinking based more on an intense dislike of George Bush - possibly born of bitterness over the 2000 election - than on economic facts. The writer ignores the fact that tax revenues actually increased after the Bush tax cuts. Tax revenues were then and remain now above historical averages - even after the tax cuts. The Heritage Foundation has published studies showing that nearly ALL of our budget deficits come not from reduced tax revenues ... but from spending increases; both from George W. Bush and Barack Obama. It's the spending - not the tax cuts - that have brought us our immense debt. But you don't want to confuse this letter writer with those facts. [...]

But it's a fact that bears repeating. When the tax cuts are allowed to expire, what do you think will happen to tax revenue? We are about to see:

What happens when Tax Cuts Expire in 2011?

Those who don't learn from the mistakes of the past, are doomed to keep repeating them.

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