GOP TAX CUTS, A PAST AND FUTURE FAIL

(h/t Andrew Sullivan)

The Bush tax cuts did not lead to terrific economic performance:

- During the 2001 to 2007 business cycle, America's economy enjoyed 52 straight months of job growth. But it was sluggish—in fact, the slowest rate of jobs growth on record since World War II, and just one-fifth the pace of the 1990s.

- Median real wages actually dropped from 2003 to 2007. Household income from business-cycle peak to business-cycle peak declined for the first time since tracking started in 1967.

- From 2001 to 2007, annual GDP growth averaged just 2.4 percent per year, lower than in any other postwar business cycle.

- So, to recap: The Bush tax cuts were followed by low GDP growth, negative median wage growth, and little job growth.

Unfortunately, idiotic tax cuts are dogma for conservatives, so we get a bad plan by Ryan and an even worse one by Pawlenty:

Pawlenty’s Fuzzy Budget Math
Some good ideas can’t compensate for overly optimistic projections.
9 June 2011
Josh Barro
CITY JOURNAL
MANHATTAN INSTITUTE

The proposal, which includes huge cuts in personal income-tax rates and ambitious spending restraints, centers on a fundamentally problematic assumption: that we can achieve an annual rate of 5 percent real GDP growth for the next decade.
... Unfortunately, there’s no reason to believe we can reach the sustained growth levels Pawlenty believes his reforms will ignite.

As for federal spending, Pawlenty has set an ambitious target of capping it at 18 percent of GDP (the current CBO baseline would put us closer to 24 percent in 2020; the Ryan budget backed by most House Republicans is over 20 percent for that year). Even if we managed to hit that number, Pawlenty’s tax plan would leave us with an unacceptably large structural budget gap—over 3 percent a year. It’s hard to imagine any situation where a federal tax code that collects less than 15 percent of GDP is sustainable.