That's all well and good, but unlike the memo "Bin Laden Determined to Attack in U.S.", this type of information should be considered a historical document. And while many of you may be interested in how it happened, most of you would be much happier with information that is sure to annoy a conservative.
So please consider this my gift to you for such a warm welcome (by the way, my welcome to the Republican Party was by no means this warm. I'll tell you about it in my next post). It regards the death of the most hallowed of conservative principals (one which has in reality died more times than Freddy Krueger), and my proof comes from the Republicans themselves.
The founding principal of `fiscal conservatism' is supply-side economics--the notion that tax cuts stimulate the economy, and therefore increase federal revenue. This is a notion famously trumpeted by The Heritage Foundation. In fact, here's a direct quote from heritage.org:
"It's simple: lower tax rates = more robust economy = more federal revenue."
Wow! You'd have to be retarded to disagree with that, don't you think? There's just one problem, and it's an ongoing problem for Republicans in general. Reality refuses to conform to their world view.
Let's take a look at numbers from the Department of Commerce and the Congressional Budget office. Last time I checked Congress was Republican, and the Department of Commerce answers to Bush, so clearly this isn't information from the liberal media. First, federal revenues from 1999 to present (in billions):
1999 2000 2001 2002 2003 2004
$1,827.5 $2,025.2 $1,991.2 $1,853.2 $1,782.3 $1,880.1
Here's what you should take away from this--federal revenues declined every year Bush passed or implemented a tax cut. Be forewarned. The first thing a Republican will say is "Don't you think that has something to do with 9-11?" Then they'll call you a traitor.
Well sure, you could say that if the economy was shrinking. Boy, I sure hope for their sake the economy shrank in 2001, 2002 and 2003 before growing again in 2004. Otherwise they're gonna wind up looking pretty stupid. To the Department of Commerce we go (figures given in billions)!
1999 2000 2001 2002 2003 2004
$9,268.4 $9,817.0 $10,128.0 $10,487.0 $11,004.0 $11,728.0
Aw, crap! It didn't work! The economy grew every year! Even in 2001! The truth is `supply-side economics' died during the Clinton administration. Think about it--if lower taxes = higher federal revenue, doesn't it necessarily follow that higher taxes = lower federal revenue? Despite what Republicans called `the biggest tax increase in history' the economy grew at an average annual rate of 3.7%, and federal revenues grew by $870 billion. Since Bush has been in office the economy has grown at an average annual rate of 2.52% and federal revenue is down by $145 billion.
So Clinton raises taxes. The economy does fine and federal revenues go up so fast they outpace spending. Bush taxes office and cuts taxes...a lot. What happens? The economy grows, but federal revenue declines. This seems stupid to us, but to Republicans it's like saying there's no Santa Claus. Just yesterday I saw a freeper make a post regarding the budget deficit by saying "So long as the economy keeps chugging along and Bush keeps cutting taxes we'll be fine." They just don't get it. They really think you can cut your income so much that you get a raise.
So here's the simple version of the dialogue you get to have with your Republican friends (I promise I will NEVER post something this long again. This is an issue that has been bothering the HELL out of me for about a year and half now, and I've got to get it out or I'll explode).
Sane Person: "If tax cuts increase federal revenues, how come it hasn't happened yet?"
Republican: "Don't you think 9-11 has something to do with it?"
SP: "Maybe...if the economy had been shrinking. But it's been growing at about 2.5% per year."
R: "Where are you getting those numbers from? Time magazine?"
SP: "Nope. The Congressional Budget Office and the Dept. of Commerce. Last time I checked those were Republican, right?"
That's where they start flopping around. It's fun to watch. This isn't about runaway spending or a media bias. It's about a flawed core belief of the Republican party. And GOD how they hate that.
And so our villain turned hero has debunked the core principal of the modern day fiscal conservative. I'm not sure how many times you have to debunk an organization before they become `thoroughly debunked.' I'm going to go with 10 times. One down, nine to go.
Update [2005-2-2 14:12:1 by advisorjim]: 2/2/05
There's a little something I posted downstream on the blog that you might want to check out. Look for the response that beings with "Now your touching on." Also through discussion I've figured out a way to summarize my point a bit more succinctly.
From 1996 to 2000 GDP grew by $2 trillion, and tax revenues grew by $550 billion. From 2000 to 2004 GDP grew by $1.9 trillion, but tax revenues declined by $143 billion. What changed? We had roughly the same level of economic activity. If tax cuts lead to more federal revenue, shouldn't $1.9 trillion in growth have yielded more than $550 billion in new tax revenue, and not a $143 billion decline?