Another four years of Obamanomics and Argentina will be crying for us.
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These tax rate cuts first quickly ended the 2001 recession, despite the contractionary economic impacts of 9/11, and the economy continued to grow for another 73 months. After the rate cuts were all fully implemented in 2003, the economy created 7.8 million new jobs over the next 4 years and the unemployment rate fell from over 6% to 4.4%. Real economic growth over the next 3 years doubled from the average for the prior 3 years, to 3.5%.
In response to the rate cuts, business investment spending, which had declined for 9 straight quarters, reversed and increased 6.7% per quarter. That is where the jobs came from. Manufacturing output soared to its highest level in 20 years. The stock market revived, creating almost $7 trillion in new shareholder wealth. From 2003 to 2007, the S&P 500 almost doubled. Capital gains tax revenues had doubledby 2005, despite the 25% rate cut!
Consequently, the Bush tax cuts helped to extend the Reagan boom for 25 years, until 2008. By then, the government had induced the financial crisis, through regulations looting the banks for subprime mortgages demanded in the name of affordable housing for the poor and minorities, and through the Fed’s cheap dollar monetary policies, which began the restoration of perverse Keynesian economics. Punishment for the results is now long overdue for the advocates of those policies.