The Gift That Keeps Giving

Fox News ^ | January 30, 2004 | Neil Cavuto

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I'm was at this event Thursday and I overheard a discussion between two obvious liberals about the tax cuts (search).

"We didn't need them," said one.

"And we've gotten all we can expect out of them," said the other.

"So let me get this straight: This tax cut feel good effect is already feeling bad?"

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Neil Cavuto on tax cuts ping.

[GailA]

btt

[TruthShallSetYouFree]

Despite the posturings of big-government liberals, the choices that a President has to impact the economy are fairly limited. The President isn't going to go into middle America, grab a hammer and start building factories to create jobs. Jobs are created by individuals and corporations if and when they believe that the economic environment favors expansion. A favorable environment is one in which individual tax rates are low (so that consumers will have money to spend on the things that businesses produce), interest rates are low (so that businesses are able to expand by borrowing money at rates that will still allow them to make a profit on their products) and corporate tax rates are low (so that businesses will be able to keep more of the profits that they have earned.)

Consumers benefit from low interest rates because it enables more of them to enter the market as home buyers, which fuels a huge segment of the market (homes, furniture, major appliances, etc.) Low interest rates also spark consumer purchases of automobiles, high-end electronics, and other purchases made on credit.

Bush has worked with the Fed (i.e., Alan Greenspan), as Clinton did, to keep interest rates as low as possible. Unlike Clinton, Bush is a tax-cutter. Bush is willing to let the deficit increase to record levels, using the Reaganesque theory that lowering taxes will expand the economy so that, eventually, more companies and more individuals will earn more money, and the tax revenues, even at lower tax rates, will reduce or eliminate the deficit.

Ignorant liberals who don't understand (or pretend not to understand) basic economics scream that a 10% tax cut will cause a 10% downfall in government revenues. They don't allow for the dynamics of a more vibrant economy.