The Obama administration has caved. The signal to the media and the Republicans is that the administration would not oppose renewing the Bush tax cuts, for growth's sake. Whether this would be a permanent tax cut is yet to be determined.
The CBHO has estimated that the budget deficit by these tax cuts alone would be 90% of annual GDP by the year 2020. Note that's before you consider the boom in Social Security and Medicare that is scheduled to happen after that year.
That's not the national debt, which is already on par with the GDP and is the culmination of all deficits since the nation's inception. That's the annual increase in our national debt. That means we'd actually be running the country into the ground, and that assumption includes the rosiest of economic scenarios.
There were actually three Bush tax cuts, in each of 2001, 2002, and 2003. The 2001 tax cut eliminated estate taxes, or taxes on people who managed to avoid taxes on increases in wealth, but whose heirs would rightly reimburse society for the wealth those assets took out of the general pool. If you take a dollar out of the general wealth pool, that's one less dollar for the rest of us.
The 2002 tax cuts were focused on business, primarily to try to stimulate economic growth (and job creation).
The 2003 tax cut was the "No. Really! We mean it this time! We Republicans will create jobs, dammit!" tax cut.
As you can imagine, all three failed, miserably, to alleviate the suffering of a modest recession that occured during the waning days of the Clinton administration and into the Bush first term.
Gross domestic product from 2000 to 2009 was as follows, on an annual basis:
2000 (the last year of Clinton's administration, just before the recession) 4.1%
2001 1.1%
2002 (the first year of Bush's tax cuts) 1.8%
2003 (the second round is in effect) 2.5%
2004 (the final round of tax cuts is effective) 3.6%
2005 3.1%
2006 2.7% (Bush tax cuts are in full effect after a phase-in of new tax rates)
2007 1.9%
2008 0.0%
2009 (Obama's first year, and the final year of Bush's budgets) -2.6%
So, in no year did Bush and his precious little tax cuts manage to come within half a percent of Clinton's final year, which included the first rumblings of a RECESSION!
Tax cuts do not stimulate economic growth. End of discussion.
Wait. What about jobs?
Precisely zero jobs were created in the decade from 2000-2009. Zero.
This, despite the Bush administration creating the single biggest bureaucracy in world history, in the Department of Homeland Security and the Transportation Security Administration!
Job growth by year
2000 (Clinton) 1.4 million jobs added
2001 (Bush) (recession) -1.7 million jobs
2002 (first year of tax cuts) -500,000 jobs
2003 87,000 jobs added
2004 2.0 million jobs added
2005 2.4 million jobs added (finally, Bush has added jobs to the economy...in his SECOND term)
2006 2.0 million jobs added (tax cuts fully effective)
2007 1.0 million jobs added (whoops!)
2008 -3.6 million jobs (!)
2009 (final year of Bush budgets) -4.7 million
Factor out the Clinton administration, and Bush is responsible for a net job loss of 2.8 million jobs.
The unemployment rate picture isn't much prettier:
2000 4.0%
2001 4.7%
2002 5.8%
2003 6.0%
2004 5.5%
2005 5.1%
2006 4.6%
2007 4.6%
2008 5.8%
2009 9.3%
In no year did Bush's unemployment rate dip below the final, recession year of Bill Clinton.
Why is this even a discussion? Obama should tell Boehner in no uncertain terms, "You guys had everything you wanted: tax cuts, a Republican president, and a Republican Congress, and you did nothing, NOTHING, for the American people. This time, we'll do it my way."
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