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Contributed by Sam Minervino 2009-02-02

Portland — POLITICALLY CORRECT ECONOMIC FACTS

by Sam Minervino

“Rep. X, of the House Financial Services Committee, said the (stimulus) bill was designed to help people who have been damaged in the economic meltdown as well as stimulate the economy.

"I never saw a tax cut fix a bridge. I never saw a tax cut give us more public transportation. The fact is, we need a mix," X said.”

The above comes from apnews.myway.com. The name is listed as X and the party affiliation omitted so as not to offend anyone on either side of the political fence. It is either a blatant lie or the Rep. is seriously deluded. Either way, the truth of the matter is this; tax cuts always increase revenues to the federal government. Presidents from both political parties who don’t engage in class warfare and embrace intellectual honesty have cut taxes for everyone to create prosperity for everyone;

“Under president Z, marginal tax rates were cut from the top rate of 73% to 24%. The economy rewarded this policy by expanding 59% from 19_ _ to 19_ _. Revenues received by the federal treasury increased from $719 million in 19_ _ to more than $1.1 billion 19_ _. That's a 61% increase (there was zero inflation in this period). Growth averaged more than six percent annually.”- http://www.mackinac.org/article.aspx?ID=676

Reading further in the article, two more presidents of different party affiliations also used tax cuts to increase government coffers;

“Under President O, marginal tax rates were cut from a top rate of 91% to 70%. In real dollar terms, the economy grew by 42%, an average of 5 percent a year from 19_ _ to 19_ _. Tax revenue to the U.S. Treasury increased by 62%. Adjusted for inflation, they rose by one-third.

Under President M, marginal tax rates were cut from a top of 70% to 28%. Revenues (from all taxes) to the U.S. Treasury nearly doubled. According to the Budget of the U.S. Government, FY 19_ _, Office of Management and Budget. Revenues increased from roughly $500 billion in 19_ _ to $1.1 trillion in 19_ _.”- http://www.mackinac.org/article.aspx?ID=676

Two other presidents, one a republican and one a democrat and in successive presidencies, increased taxes and the result were as follows;

“…there is a correlation between the President Y and President F tax hikes and a change in the revenue received by the Treasury. Martin Feldstien, professor of economics at Harvard, estimates that the U.S. Treasury would have collected two-thirds more revenue during the first three years of the F presidency had his administration NOT raised taxes.”- http://www.mackinac.org/article.aspx?ID=676

The U.S. economy will recover not because of government but despite it. The problem isn’t that the government is lacking cash; the problem is the government spends too much money. The stimulus package is merely an excuse for more spending which is contrary to everything economically sensible. We need to force our government to get spending under control. We have been asked to sacrifice to help the economy. The people that need to sacrifice are our government leaders. They need to make the tough choices even if it means sacrificing their political careers for the sake of everyone. But don’t look for that to happen by any of them on either side.