HANNITY GETS A GOOD QUESTION

One of the callers to his radio show asked him WHEN we would see all the benefits from the Bush tax cuts and Hannity only had lies in response. First, he falsely claimed that when Bush took office, we were in the "Clinton/Gore recession" when in fact the recession did not start until March 2001. He then claimed that Federal tax revenues increased because of the tax cuts. Paul Krugman lets us know the facts:

Bush tax cut mythology
January 14, 2008, 2:37 pm

As the debate turns to economic stimulus, we’re starting to hear this: “Bush realized that the economy needed help, so he asked Congress to enact tax cuts to provide stimulus. And this turned the economy around.”

None of this is true.

There were two main Bush tax cuts — EGTRRA, enacted in mid-2001, and JGTRRA, enacted in 2003. (What do the letters stand for? All sorts of good stuff. If we ever have legislation decreeing death of the first-born, it will be named MPAPRA, the Motherhood Patriotism and Apple Pie Reconcilation Act, or something like that.) (I think I screwed up the letters on the chart, but it really doesn’t matter.)

Here’s the employment-population ratio, which gives a pretty good read on the state of the economy, and the timing of the two tax cuts.

EGTRRA arrived in the middle of a recession, but that was an accident. It was devised in 1999, when the economy was booming, to defend Bush’s right flank against Steve Forbes. During the 2000 campaign, Bush sold it as a way of returning budget surpluses to the people, with not a hint that it had something to do with fighting recession. The recession story was an after-the-fact reinvention.

And EGTRRA didn’t seem to help all that much. Formally, the recession ended in late 2001, but most labor-market indicators continued to worsen into mid-2003.

JGTRRA, which mainly cut tax rates on capital gains and dividends, was followed by a real recovery. And the Bushies naturally claimed the credit. But the real source of the expansion was the housing boom, which had very little to do with the tax cut.