No, The Bush Tax Cuts Didn't Help The Economy

They helped the rich, period.  Yves Smith at NakedCap takes a look at this morning's piece in the Washington Post on the subject.  The Post's article's last point is especially important:

One theory holds that the country's long-term budget shortfall is "just" an entitlements problem, the result of rising costs associated with growing Social Security rolls and increased health-care spending (via Medicare and Medicaid). Republicans like this idea because it plays down tax increases as a potential solution. Democrats like it because it makes the recent health-care package seem like even more of a triumph.

But it just isn't true. The deficits we face over the next decade reflect a fundamental imbalance between spending and revenue, one that goes beyond entitlements. Based on projections by the CBO, Alan Auerbach of the University of California at Berkeley and myself, among others, even if the economy returns to full employment by 2014 and stays there for the rest of the decade, the continuation of current fiscal policies, including the Bush tax cuts, would lead to a national debt in the range of 90 percent of GDP by 2020. That's already the highest rate since just after World War II -- and Medicare, Medicaid and Social Security aren't expected to hit their steepest spending increases until after 2020.

According to these same projections, the yearly deficit would rise to 6 to 7 percent of GDP by 2020. The Bush tax cuts would account for a significant chunk of this, considering that in each year they are in effect, the revenue lost because of them amounts to nearly 2 percent of GDP.

Compounding the problem: By increasing the government's debt, the tax cuts have already led to higher interest payments on that debt. So even if all of the cuts expire on Dec. 31, we will still be paying for them for years to come. 

As I have been saying for some time now, the largest single factor in our deficit is not Obama, is not entitlement spending, but Bush's tax cuts.  Period.  They are indefensible, especially on the rich.  We've lost hundreds of billions in revenue already over the last five years, and how has that helped the economy?  We're now in the worst economic straits in generations.

Yet Republicans keep spouting idiocies about how tax cuts pay for themselves when they are costing us billions, and eventually trillions.

Yves sums it up:

John Quiggin and others have pointed out that the benefits of income tax cuts over the last 30 years have accrued disproportionately to the top 10%. The Bush tax cuts were so egregiously skewed towards the well off that Warren Buffett objected to them, with Buffett noting that as a result, his secretary paid a higher percentage of her income in taxes than he did. Similarly, 100 uber rich individuals, including Steven C. Rockefeller and other members of the Rockefeller family, Metropolitan Museum board chairwoman Agnes Gund, and George Soros, signed a letter opposing a proposed 2001 estate tax repeal.

It's always been about restoring the Gilded Age for the Republicans, and always will be.  That is at the heart of everything they do:  taking the country backwards.