Obama’s stimulus plan: Unemployment hits 10.2%

Thanks to President Obama’s stimulus plan, which promised to keep unemployment below 8%, we’re now seeing unemployment hitting double-digits at 10.2%. This is despite the president’s promise that the billion dollar stimulus plan passed in February would spur economic growth.

Report from Heritage:

On November 6, the Bureau of Labor Statistics announced that the unemployment rate had soared from 9.8 percent to 10.2 percent in October. Jobs losses in October–190,000–were higher than expected. As job losses mount, the monthly jobs report continues to demonstrate both the failure of the stimulus bill and the hollowness of the Administration’s claim that it created or saved 640,000 jobs. Congress and the Administration should encourage private-sector investment and entrepreneurship instead of attempting to plan a recovery from Washington.

The Heritage Foundation put together a fantastic chart showing how abysmally wrong the White House’s estimates were compared to the reality that is our new 10.2% unemployment number:

wm2685_chart1

Here’s another graph illustrating Obama’s obvious failures:

obama unemployment rate lies

This is further exacerbated for the administration given the falsities continuing to be uncovered in their claim of jobs being “saved or created,” which is total nonsense. Hot Air has a story showing that 25% of the “saved or created” jobs on California are bogus according to the Sacramento Bee.

  • Bill Hedges

    A very good article. You have little reason to believe opposition will come forth with differing facts & reasons. It may be insulted.

    So is the times we must face.

  • The numbers don’t lie, Obama’s stimulus was a failure and our kids and their kids will still be paying for it.

    This isn’t debatable anymore, Obama’s stimulus failed at it’s core objective: JOBS!

  • Yao

    Pretty good chart domostrating Obamas big loss on his recovery plan.but what it said should have been based on the fact that white house estimates on with and without the “plan” are both correct.
    But we know that the estimate is not liable.It apperently underestimated the degree that the situation right now bringing harm to the economy.So there would be large possibility that the unemployment rate would be much higher than 10.2%.
    So it is not enough to say Obamas plan has already been failure.

  • Yao

    The white house’s estimation was not correct on both with and without plan.It would be much worse if the stimulus plan havnt carried out.
    The chart its own is such a big liar!!!!

  • Yao,

    The President said we needed to pass the stimulus plan to keep unemployment below 8%. Most of us knew that was a total lie and now the numbers have proved it.

    Tell me, Yao, with 49 states losing jobs since Obama took office and 10.2% unemployment, how can you argue that it wasn’t a total failure and waste of a billion dollars?

    It was a waste and we’ll be paying for it for years down the road and we have double-digit unemployment.

    The chart is based on factual statistics.

  • Yao

    Nate,
    First of all,I live in China and dont know much about whats the situation before and after the plan being carried out.What i talked about is just the chart itself.
    There is no doubt that the article implied some meaning that it got even worse after taking the plan comparing to if we have not.And this theory is based on the contrast between the “actual rate curve” and the “without plan curve”.But dont you feel there is an apparent logical error in it?The without plan curve was estimated before the plan being carried out,if the estimation was wrong,the contrast makes no sense at all.
    So what we got only from the chart is that the white house underestimated the economy situation.There should have been a “higher” curve and a longer “raising period” before it goes down. And we actually need more time to wait till the rate goes down.

  • Yao

    Yeah the chart is based on the fractual stats,but the contrast isnt that logical.And this artical is so deceptive to let people believe “doing nothing” is the best thing.

  • Yao

    And it was lack of evidence that if we did nothing,it would turn out better.
    So what we need to do now is to stick to this plan and reevaluate the economy to figure out how long on earth we should wait the bright day comes.

  • Yao

    Facing this kind of financial crisis,any president needs time.its like if you get a bad flu,dont expect you can recover right after taking pills,on the contrast,you even would have a worse-off period before you get better.So if you dont recover soon dont blame on the pills because its really a bad flu.

  • Yao,

    Thank you for the logic. Sometimes people are in a hurry to discredit things and don’t allow time to show and prove things.

  • Bill Hedges

    Yao

    I agree it takes time to get a sick economy well.

    Our economy tanked because Democrats allowed unqualified home buyers to buy homes. No or little money down , good work record and steady job.

    Our President at the time Bush warned of finical institutions bad situation. Was ignored by Democrats. When interest rates increased with high number of variable home loans (used to help get more unqualified home buyers. Which Democrats was pushing) our collapse occurred.

    Problem with stimulus package is the spending. We call it pork. Pork means special interest spending. Not necessarily productive projects.

    We are finding lies in the number of jobs created by stimulus plan. By on site checking. Also jobs created in districts that do not exist.

    You may know more about Japan’s ’lost decade’. They tried to spend their way out of bad times. It did not work and they were not going deep into debt borrowing from China.

    Proven way out of recession is creating jobs through tax cuts and making government smaller than larger.

    Enjoy reading you thoughts. Maybe this link will explain it better than I can

    http://www.heritage.org/research/taxes/wm327.cfm

  • Bill Hedges

    Yao

    One last thing for now. Many jobs being created now are government jobs. Means tax money being spent to pay his salary.

    Is not productive employment. By that I mean is not helping our economy though is helping that particular family.

    Creating private jobs increases government revenue whereas government employments doesn’t. The link I provided you show that government revenue increased with tax cuts along with smaller government.

    Obama is creating higher direct and indirect taxes on all Americans. America has one of the greatest economies based on individual freedom. Our social social security and medicare are like $100 trillion in debt. Majority of citizens show their dislike of health care bill in all polls that I know of. This is anti-business. Companies tend to leave our shores and find greener pastures.

    All countries and States having public health plan must restrict care and are deep in debt.

    We have been in recession before and will again. What we have not done before is be in debt more than all previous Presidents in our history as obama has done combined. Yet he inspires to go further in debt.

    Our Stock Market started recovery. Due to actions of Bush. Takes time for actions to show improvement (6-9 months). Debt destroys recovery. Destroying the ‘dollar’. Leading to inflation. Ours may be mega.

    America wants China to stop burning coal bought from America. Losing American jobs and increasing cost for China.

    So to just ‘wait’, is not a option

  • Bill Hedges

    Yao

    Do ‘nothing’ is not Conservative option. We do not want to repeat Japan’s ’lost decade’ nor our past big government spend spend spend failed policies.

    We want waste in social security, medicare abolished. In all of government as far as that goes. In private companies are wasteful and/or doesn’t met the need of the customer, it adopts or closes its doors. Not saved with our tax dollars. Becoming a ward of the government as Car manifesting union workers are and maybe soon all our banks.

    Polls clearly shows President’s agenda are not wanted.

  • Yao

    Bill,
    Thank you for telling me so many things about the economy and the politics.Im just a young man in China and didnt know much professional knowledge.So I didnt mean we should just wait but i honestly dont know how to do exactly.Finally,I really love to read your comments.
    I agree with you that the health care reform should be paused,for the economy is so bad now,that the reform sounds like so crazy.But i do think its necessary for us to carry it out again if our economy turns out better.
    But i do think the stimulus plan is necessary.I dont know what was going on during Japan’s lost decade.But i do know the reason why China’s economy is still strong in the crisis.The Chinese government just sticks to its stimulus plan which means the central bank keeps on throwing tons of money into the market,and it has turned out to be so good.So i believe America can do it too.
    Besides,in my opinion,the general direction of the stimulus plan is right.And the reason why the economy is still bad maybe as follows:
    1),The crisis is too bad,and we still need time.
    2),There was something wrong on details while the plan being carried out,Just like you said.But its totally right.
    So what we need to do is to detect and adjust whats going wrong as the plan being carried out and keep it on the right track.Because according to China’s experience,i do know that the stimulus plan is needed especially when the recession comes.

  • Yao

    Kendale,
    Thanks for your support.English is my second language,and its really hard for me to convey my idea on such a complicated issue.so im feeling so blessed that there were someone would like to read my poor english.haha,its such a big honor.

  • Bill Hedges

    Yao

    You English is very good. My Chinese is non-existent.

    Thank-you for the compliments. I appreciate your input. You know more about our economy than I know about your.

    I know our health care needs improvements. Tort reform are laws. This needs changing. Many extra test must be done by Doctors for lawsuit reasons. By changing tort laws cost will be lowered.

    Free competition between States will lower health care cost. Our Country has flourished through free competition. Now this is very limited.

    There are many others.

    Yao said “But i do think the stimulus plan is necessary.”

    I must disagree. I hope you read my link I provided you. America is broke and borrowing money from your Country.

    Stimulus plan is being found to be full of lies concerning jobs created. Maybe 1-6 non-real. More news daily.
    …..

    Here is another article for you to consider:

    “To Create Jobs, Voters Say Cut Taxes and Stop Spending”
    Thursday, November 19, 2009

    “As the policy debate has unfolded in Washington this year, voters have consistently believed that tax cuts would do more than increased government spending to stimulate the economy and create jobs. Now that the nation’s unemployment rate has reached 10.2%, voters continue to hold that view.”

    “The latest Rasmussen Reports national telephone survey shows that 62% believe tax cuts are a better way to create jobs and fight unemployment. Only 21% believe that additional stimulus spending is a more effective tool. Earlier this year, as the first stimulus package was being debated in Congress, 62% of voters wanted the plan to have more tax cuts and less spending.”

    “Given a different choice today, 51% believe canceling the rest of the stimulus money would create more jobs while 32% say spending the money would be the better approach to job creation. These findings are consistent with earlier polling. Most Americans say that, generally speaking, increased government spending is bad for the economy. Earlier this year, before the unemployment rate had reached its current highs, 45% wanted to cancel the rest of the stimulus spending while just 36% disagreed.”

    “While voters believe that tax cuts and stopping spending is the path to job creation, the Political Class disagrees. Sixty-nine percent (69%) of those in the Political Class say that spending the stimulus money would create more jobs than canceling the remaining stimulus spending. Fifty-five percent (55%) of the Political Class believes that new spending will create more jobs than tax cuts. Only 13% believe the tax cutting would do more (see more on the Political Class).”

    “On both questions, there is also a substantial partisan divide. Democrats are fairly evenly divided on both questions while Republicans overwhelmingly believe that canceling the rest of the stimulus money and cutting taxes are better job creation tools than additional stimulus spending.”

    “As for those not affiliated with either major party, just over 50% say that stopping spending and cutting taxes is the best way to create jobs.”

    “The survey also found that most voters are skeptical about claims of government job creation. Most (58%) say it’s unlikely that the stimulus plan has saved or created more than 600,000 jobs.”

    “Sixty-two percent (62%) of voters are opposed to a second stimulus package.”

    http://www.rasmussenrepor…..p_spending

    …..

    The eariler link I gave you is actual history of tax cuts.
    Showing tax cuts create jobs and increases government revenue.

    This latest link is a poll.

    I am going to bed soon. Have enjoyed debating with you. Hope to read more of your comments.

  • Bill Hedges

    Yao

    Problem with present health care bill is too massive and full of bad things.

    Canada, Enland and Countries that have public heaith care must ration their care and are deep in debt. As a few States are that have public plans now.

    America’s two other social programs are like $100 Trillion in debt. Social security and Medicare.

    We can correct our health care problems without massive overhaul.

  • Yao

    Bill,
    You are such a productive writer!!!You write things damn fast!!!If Im allowed to write in Chinese,we can really have a real competitive debate.lol.But you know I surely cant be that competitive in English.
    Onto the stimulus plan,i just want to cite one example of a president of America–President Roosevelt.I believe you know it pretty well that how he helped american out of the big recession.Dont you find theres some similarities between he and Obama.i mean their policies on economy.
    And I read the articles you just recommended.Its just some stats of some polls which reflect anxiety and impatience of Ameircan people under the bad economy right now.From our common sense,everybody would be like that in the bad situation.Its just like when we are in the recovery of a flu,we often would like to complain the medicine sucks.So this kind of complaination is not rational nor responsible. We just cant rander it as an excuse to stop the plan being carried out.I definitely cant imagine what if we cease the plan and go back to what we were one year ago.Its so horrible.

  • Bill Hedges

    Yao

    Please read first link I gave you. This is historic information not poll. Although polls goes along with history.

    http://www.heritage.org/research/taxes/wm327.cfm

  • Yao

    Bill,
    Onto the fact that Ameirca borrow so much money from China,I really dont think that it is the signal that Ameirca has been broke.You know its totally different concept from the debt between individuals.
    Borrowing money is just can bring more profits to America than they dont.If China would like to buy some debt,so why not?
    Its just a win-win deal,It is just one deal.So nothing to be scared.

  • Yao

    Alright,I will come back tmrw.Im so tired.

  • Bill Hedges

    FDR got out of Depression because of the war. Yes I agree that obama and Rosevelt have simular beliefs.

    Was wondering do you now live in America or China ?

    I planned on going to bed but watching a cooking show on tv.

    I want to see what you think of heritage link I just gave to you a second time. Want to know your thoughts on this link.

  • Bill Hedges

    Yao

    I agree is nothing to be scared of. However obama is not talking to China about human rights. Not that America is perfect. But America does try hard to give freedom to individuals.

    I know China is worried with all our spending infation will devalue our dollar. Which means paying back with dollars worth less. Not a good deal for China. That is not a win-win.

    Debt loses jobs in America. As does higher taxes.

    So Good night.

  • Yao

    I was in China for sure.Its 5pm right now.And i bet your in the Pacific time zone,cos it almost in the morning in the Eastern coast.
    I’ll read that link,but Im gonna have something to do later on in the evening.So I will give my thoughts out tmrw.
    Goodnight

  • Bill Hedges

    Yao

    Here is article I wanted you to read. Interested in your opinion. Plenty of graphs and other things in link.

    July 19, 1996
    “The Historical Lessons of Lower Tax Rates”
    by Daniel J. Mitchell, Ph.D.

    “Introduction”

    “The 1996 presidential campaign has rekindled the debate over tax reductions. Among the proposals being considered are an across-the-board reduction in tax rates, the repeal of rate increases imposed in 1990 and 1993, the deductibility of payroll taxes, and a modified flat tax. But regardless of the particular features of each change under consideration, the argument is the same. Proponents argue that lower tax rates will spur economic growth by reducing the penalty on working, saving, and investing. Opponents disagree, claiming that the economy is doing fine and that tax rate reductions, if enacted, will help the rich disproportionately while widening the deficit.”

    “Fortunately, there is a way to judge the desirability of lower tax rates. The United States has had three major episodes of tax rate reductions — the 1920s, 1960s, and 1980s. By looking at how the economy performed during these periods, and by examining what happened to the deficit and the degree to which different income classes were affected, it is possible to gain useful evidence about the desirability of tax rate reductions today.”

    “The evidence provides strong support for those who believe the economy is weak and favor reductions in tax rates. Recent history is especially compelling. Tax rate increases in 1990 and 1993 boosted the top rate to 39.6 percent (and over 42 percent including the Medicare payroll tax). This means a 50 percent increase in the tax burden on work, saving, investment, and entrepreneurship when compared with the 28 percent rate in effect when Ronald Reagan left office. The effect has been dismal:”

    “•During the post-Reagan era, the economy has experienced its worst seven-year performance since the end of World War II.”

    “•Real median family income, the best measure of living standards for the average American, has fallen by more than $2,000 since Reagan left office.”

    “•Assuming there is no change in policy, the Congressional Budget Office estimates that economic growth for the next ten years will average less than 2.1 percent annually.1 This is well below the post-World War II average of 3.2 percent.”
    “The economy’s sub-standard performance in recent years should come as no surprise. As seen below, major changes in tax policy inevitably affect growth.”

    “•Across-the-board tax rate reductions in the 1920s reduced the top rate from 71 percent to 24 percent. The economy boomed, growing by 59 percent between 1921 and 1929.”

    “•In 1930, Herbert Hoover raised tax rates from 25 percent to a maximum of 63 percent, and Franklin Roosevelt boosted them to 79 percent later in the decade. The 1930s, to put it mildly, are not remembered as one of the American economy’s better decades.2”

    “•Across-the-board tax rate reductions introduced by President John F. Kennedy reduced the top rate from 91 percent to 70 percent. These lower rates, along with substantially lower taxes on savings and investment, are associated with the longest economic expansion in American history.3”

    “•The Johnson surtax, enacted in 1968 during the administration of President Lyndon Johnson, combined with the inflation-induced bracket creep of the 1970s (subjecting taxpayers to higher rates even though their real incomes had not changed), resulted in a decade of stagflation.”

    “•Reagan’s across-the-board tax cuts ushered in America’s longest peacetime expansion, helping to create 20 million new jobs and pushing incomes and living standards to record highs.”

    “•The tax rate increases imposed under George Bush and Bill Clinton, as outlined below, are associated with the slowest growing economy in 50 years and a decline of more than $2,000 in the average family’s income.”

    “If legislators want to unleash stronger growth and more prosperity, the best tax policy would be the flat tax. Under that proposal, all three major problems of the current tax code — high rates, anti-capital bias, and complexity — would be minimized. To the extent that politicians are reluctant to adopt a flat tax, however, any change that moved in the right direction would be helpful. If history is any guide, any tax rate reduction, whether a 15 percent across-the-board cut, a repeal of the Bush and Clinton tax hikes, or some other reform, would boost the economy and raise living standards.”

    “Looking at Case Histories”

    “The effect of tax rates on economic activity should not be overstated. The economy, after all, can be affected significantly by trade policy, regulatory policy, monetary policy, and many other government actions. Even within the context of fiscal policy, tax rates are not the only critical issue. Both the level of government spending and where that money goes are very important. And even when looking only at tax policy, tax rates are just one piece of the puzzle. If certain types of income are subject to multiple layers of tax, as occurs in the current system, that problem cannot be solved by low rates. Similarly, a tax system with needless levels of complexity will impose heavy costs on the productive sector of the economy.”

    “Keeping all these caveats in mind, there nonetheless is a distinct pattern throughout American history: Simply stated, when tax rates are reduced, the economy prospers, tax revenues grow, and lower-income citizens bear a lower share of the tax burden. Conversely, periods of higher tax rates are associated with subpar economic performance and stagnant tax revenues.”

    “The 1920s”

    “Under the leadership of Treasury Secretary Andrew Mellon during the Administrations of Presidents Warren Harding and Calvin Coolidge, tax rates were slashed from the confiscatory levels they had reached in World War I. The Revenue Acts of 1921, 1924, and 1926 reduced the top rate from 73 percent to 25 percent.”

    “Spurred in part by lower tax rates, the economy expanded dramatically. In real terms, the economy grew 59 percent between 1921 and 1929, and annual economic growth averaged more than 6 percent.”

    “Notwithstanding (or perhaps because of) the dramatic reduction in tax rates, personal income tax revenues increased substantially during the 1920s, rising from $719 million in 1921 to $1,160 million in 1928, an increase of more than 61 percent (this was a period of no inflation).4”

    “The share of the tax burden borne by the rich rose dramatically. As seen in Chart 5, taxes paid by the rich (those making $50,000 and up in those days) climbed from 44.2 percent of the total tax burden in 1921 to 78.4 percent in 1928.”

    “This surge in revenue was no surprise to Mellon:”

    “The history of taxation shows that taxes which are inherently excessive are not paid. The high rates inevitably put pressure upon the taxpayer to withdraw his capital from productive business and invest it in tax-exempt securities or to find other lawful methods of avoiding the realization of taxable income. The result is that the sources of taxation are drying up; wealth is failing to carry its share of the tax burden; and capital is being diverted into channels which yield neither revenue to the Government nor profit to the people.5
    The 1960s”

    “President Kennedy proposed a series of tax rate reductions in 1963 that resulted in legislation the following year dropping the top rate from 91 percent in 1963 to 70 percent by 1965.6”

    “The Kennedy tax cuts helped trigger the longest economic expansion in America’s history. Between 1961 and 1968, the inflation-adjusted economy expanded by more than 42 percent. On a yearly basis, economic growth averaged more than 5 percent.”

    “Tax revenues grew strongly, rising by 62 percent between 1961 and 1968. Adjusted for inflation, they rose by one-third.”

    “Just as in the 1920s, the share of the income tax burden borne by the rich increased. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent.7”

    “According to President Kennedy:”

    “Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits. Surely the lesson of the last decade is that budget deficits are not caused by wild-eyed spenders but by slow economic growth and periodic recessions and any new recession would break all deficit records. In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.8
    The 1980s”

    “President Reagan presided over two major pieces of tax legislation which together reduced the top tax rate from 70 percent in 1980 to 28 percent by 1988.”

    “The economic effects of the Reagan tax cuts were dramatic. When Reagan took office in 1981, the economy was being choked by high inflation and was in the middle of a double-dip recession (1980 and 1982). The tax cuts helped pull the economy out of the doldrums and ushered in the longest period of peacetime economic growth in America’s history. During the seven-year Reagan boom, economic growth averaged almost 4 percent.”

    “Critics charge that the tax cuts caused higher deficits, but they misread the evidence. The Reagan tax cut, though approved in 1981, was phased in over several years. As a result, bracket creep (indexing was not implemented until 1985) and payroll tax increases completely swamped Reagan’s 1.25 percent tax cut in 1981 and effectively canceled out the portion of the tax cut which went into effect in 1982. The economy received an unambiguous tax cut only as of January 1983. Thereafter, personal income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).”

    “Contrary to conventional wisdom, it was the “rich” who paid the additional taxes. The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988.9″

    “One of the chief architects of the Reagan tax cuts was then-U.S. Representative Jack Kemp (R-NY). According to Kemp:”

    “At some point, additional taxes so discourage the activity being taxed, such as working or investing, that they yield less revenue rather than more. There are, after all, two rates that yield the same amount of revenue: high tax rates on low production, or low rates on high production.10
    The Lessons”

    1)” Lower tax rates do not mean less tax revenue.”

    “The tax cuts of the 1920s”
    “Personal income tax revenues increased substantially during the 1920s, despite the reduction in rates. Revenues rose from $719 million in 1921 to $1164 million in 1928, an increase of more than 61 percent (this was a period of virtually no inflation).”

    “The Kennedy tax cuts”
    “Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation).”

    “The Reagan tax cuts”
    “Total tax revenues climbed by 99.4 percent during the 1980s, and the results are even more impressive when looking at what happened to personal income tax revenues. Once the economy received an unambiguous tax cut in January 1983, income tax revenues climbed dramatically, increasing by more than 54 percent by 1989 (28 percent after adjusting for inflation).”

    2)” The rich pay more when incentives to hide income are reduced.”

    “The tax cuts of the 1920s”
    “The share of the tax burden paid by the rich rose dramatically as tax rates were reduced. The share of the tax burden borne by the rich (those making $50,000 and up in those days) climbed from 44.2 percent in 1921 to 78.4 percent in 1928.11”

    “The Kennedy tax cuts”
    “Just as happened in the 1920s, the share of the income tax burden borne by the rich increased following the tax cuts. Tax collections from those making over $50,000 per year climbed by 57 percent between 1963 and 1966, while tax collections from those earning below $50,000 rose 11 percent. As a result, the rich saw their portion of the income tax burden climb from 11.6 percent to 15.1 percent.12”

    “The Reagan tax cuts”
    “The share of income taxes paid by the top 10 percent of earners jumped significantly, climbing from 48.0 percent in 1981 to 57.2 percent in 1988. The top 1 percent saw their share of the income tax bill climb even more dramatically, from 17.6 percent in 1981 to 27.5 percent in 1988.13”

    “The 1990s: Ignoring the Lessons of the Past”

    “Unlike reductions in tax rates, increases in tax rates have a history of failure. The Hoover and Roosevelt tax increases of the 1930s certainly contributed to the dismal economy during the Great Depression. Tax revenues fell during much of the period, and the deficit increased. And as Chart 11 shows, the high tax rates of the 1950s resulted in sluggish revenue growth. Ignoring history, both Democrats and Republicans at the time argued that tax rates reaching over 90 percent could not be cut for fear of revenue loss. Moreover, the 1970s, which began with the Johnson surtax and later were hit by bracket creep, triggered the tax revolt and the Reagan tax cuts.”

    “Perhaps more than any other decade, however, the 1990s make the best argument against higher tax rates. In both 1990 and 1993, the economy was subjected to record tax increases, the ostensible purpose of which was to raise revenue to reduce the budget deficit. As Chart 12 illustrates, however, these increases backfired. Total tax revenue, as a percent of economic output, is expected to be lower this year than it was when Reagan left office.14”

    “Significantly, the modest decline in revenues relative to gross domestic product (GDP) is due to the slower growth in personal income tax revenues. As shown in Chart 12, individual income tax revenues totaled 8.6 percent of economic output in 1989. By 1996 — two large tax increases later — individual income tax revenues had fallen to 8.5 percent of economic output. In other words, the tax that was increased the most accounts for the drop in tax revenue as a share of national output.”

    “High tax rates are bad for the economy. High tax rates that increase the deficit by reducing the growth of tax revenue are even worse. What makes recent history especially tragic is that the economic and budgetary losses could have been avoided if Bush and Clinton had simply kept Reagan’s policies in place. In 1989, the Congressional Budget Office projected that the budget deficit, which then was $152 billion, would continue to fall for the next five years assuming no change in Reagan’s policies. As of 1995 — again, two large tax increases later — the budget deficit had risen to $164 billion, and it is projected by the CBO to reach more than $400 billion by 2006 if Clinton’s policies are left in place.”

    “The dismal budget numbers, however, tell only part of the story. The economy has been the real victim of higher tax rates. As Chart 13 shows, the post-Reagan era has seen the slowest growth of any seven-year period since the end of World War II. As discussed earlier, this slow growth has left people with more than $2,000 less income when inflation is taken into account. The biggest losers have been the poor. As Chart 14 illustrates, income for the bottom 20 percent has fallen the most during the Bush/Clinton era. The politicians who imposed the higher taxes, needless to say, argued that the rich would be the ones to suffer.”

    “Conclusion”

    “The economy is limping, incomes have been falling, tax revenues are stagnant, and it is projected that the deficit will more than double in the next ten years. This is the legacy of higher tax rates and a tax code that punishes working, saving, and investing. History shows clearly that the way to reverse this trend is to cut tax rates. Legislation to reduce rates would do this. Better still, Congress should scrap the current system as quickly as possible and replace it with a flat tax that treats all taxpayers equally and minimizes the burden on productive behavior.”

    http://www.heritage.org/Research/Taxes/BG1086.cfm

  • Yao

    Bill,
    You know what?its definitely a tough reading meterial for me.and something professional I dont know at all.After all,economy is not my major and im just a twenty year old man living in China.
    But anyway,I agree that less tax is positive for a nation to step out of the crisis.But the stimulus plan is important too.In China,the stimulus plan has never been carried out at the cost of our increasing tax.I dont know how they managed to do it.
    So I argue that American government should find a balance between the stimulus plan and tax.And I agree that the gov should levy more tax from the rich people(top 10%) and encourage(reduce their tax) companies which can provides more jobs.
    What we should do now is not to come back to what we were used to be like one year ago,because that means all we did in the year 2009 is all in vain!!!The stimulus plan has been working out in China and many other countries around the world.I believe that American can make it too.
    Just make some adjustments will be OK,because the gov is apparently lack of experiences to cope with this kind of issue.

  • Bill Hedges

    Yao

    I understand your problems in understanding.

    Liberals on this site do not read this article. JD and Kenny are so tied to their politics they ignore anything that jeopardizes their beliefs. I hope you are not that way to.

    The article can be boiled down to this:

    1. Government collects more revenue by cutting taxes.

    2.Rich pay higher % of tax than poor by cutting taxes.

    3. Jobs are created.
    …..

    FDR spending did a lot of good. Schools, bridges, etc were all build during that period. My Father planted trees.

    As far as I know FDR money was well spent on projects needed. Although he had high taxes and did not increase government revenue, I find him to be an excellent President.

    Obama spending is full of political graft. His website was upgraded for $18 million. We don’t know original cost because that paperwork is blacked out. Like it was Top Secret.

    The stimulus package you like is full of political graft. Full of pet projects Congress members waned done. The bill was advertised as ‘shovel ready projects’, yet little occurred. Road works already in the works received big expensive signs saying part of stimulus package. Reported jobs gained because of plan was inflated and/or simple made up.

    This plan is corrupt. Just as government corrupted home loans to needy causing all these home foreclosures and financial institution’s downfall. Government strong armed these institution. One only has to look at government partial ownership of Fanny and Freddie to see this clearly.

    Bush and McCain warned Congress around the year 1995 of collapse and was scarf at. Yet it happened. Liberal say Bush is dumb and bad President, yet listening to Bush could have saved our economy. Sarah Palin is made fun of and ridiculed. What is a treat to the far right is condemned.

    Obama is getting ready for job summit. What we may see is another stimulus package and money pumped into banks for small business loans. What is certain a % of business will fail as they always do. I expect a higher percentage do to government interference. Loans to unqualified individuals. Just like unqualified home buyers.

    So many of stimulas plan jobs are government jobs. They are not useful for increasing government revenue.

    Tax cuts spur private business growth and jobs jobs jobs. That is how government revenues grows through tax cuts.

  • Bill Hedges

    Bad home loan spending got America into a recession. Not a depression. Bad spending is not going to get America out.

  • Bill Hedges

    Yao

    Here is some reading that may help you understand better than I can explain.

    “Will Federal Health Legislation Cause the Deficit to Soar?”

    Daniel J. Mitchell, Senior Fellow, Cato Institute

    http://www.cato.org/pubs/tbb/tbb-58.pdf

    “Even Obama’s Make-Believe Jobs Are Not Real”

    Posted by Daniel J. Mitchell

    http://www.cato-at-liberty.org/2009/11/16/even-obamas-make-believe-jobs-are-not-real/

    http://www.cato.org/mediahighlights/index.php?highlight_id=888

  • Liberals on this site do not read this article. JD and Kenny are so tied to their politics they ignore anything that jeopardizes their beliefs. I hope you are not that way to.

    you know that is wrong. I am very open to counter opinion. But because I will not bow down to your belief system, you run your mouth like a child. My apologies for not converting to your belief system. Jesus is a good enough role model for me thank you.

  • Bill Hedges

    I have no expectation that you can learn. You have shown in your comments inability to learn. Or simple to comprehend. You misquote and you misunderstand. As far as health care one week you are for and against the next week, depending on who you are talking to. In my youth we would call you a scattered brain. Stay in your religious mode. More acceptable than your cussing mode.

    As you have said you are here to be entertained…

  • You above comment shows that you are guilty of what you’ve accused me of. You completely fail to understand me at all. I have an incredible ability to learn and comprehend anything laid before me. I do not switch my beliefs on health care. I simply disagree with weak arguments against Obamacare and state that I am not afraid of it. I never said that I was for it. So I wish you would ignore me rather than outright lie about me. Thou shalt not lie Billy. Why do you even bring me up in conversations with others, it shows you love to bait me into your worthless conversations. If you are such an astute debater then you would not need to drag my name into your comments when you and I were not debating, as you did with Yao.

  • Bill Hedges

    Kenny

    When I start doing what you tell me to do I will start selling drugs and using drugs like you did. I will go to jail for beating up a woman like you did.

    Yep preach your gospel.

    Are you entertained ?

    I sure wish you would quote me and prove why it is a lie. Not by your word by the way. Your word as a ex-convent in jail is worth little to me.

    Would be nice if you provided links to your quotes. As well as proper punctuation. You may know them as “”. I’ve noticed recently your doing this again.

  • Yao

    Hey guys,Lakers won again,2 slam dunks by Shannon Brown,Did you watch that?

  • Bill Hedges

    Yao

    Not Much into sports

  • Much more into running his mouth in negative fashion. 🙂

  • Debra

    What about those of us that have been unemployed for the 99 weeks, we are the fogotten. My unemployment ran out almost two months ago. Yesterday I had my phone, internet, and tv turned off. Which is wonderful when looking for a job. I had to put the bill on my credit card. Next is my electric or house payment, ummmm lets see where is the fairness for those of us American Citizens out of work with no jobs availilable in our state? So now they show unemployment is down? LMAO what a joke, people are kicked off and still have no jobs. Sucks to be an AMERICAN