Fast One

Chait, Jonathan
November 2003
New Republic;11/17/2003, Vol. 229 Issue 20, p10
The author argues that one good economic quarter does not mean that U.S. President George W. Bush's tax cuts have been effective in bringing about an economic recovery. When the news broke last week that the economy had grown at a 7.2 percent annual rate last quarter, it didn't take long for President Bush and his supporters to spring into action. "The tax relief we passed is working," gloated the president in an Ohio speech. "Democrats won't give Bush credit for gains," accused a Washington Times headline. At this point, it's worth recalling what us "naysayers" actually said. First, we protested that Bush's 2001 tax cut, and the two that followed, were highly regressive. Certainly nothing has happened to weaken this case. Second, we predicted the tax cuts would leave the government strapped at a time when it needed to prepare for the baby-boomer retirement. With deficits projected to total $5 trillion over the next decade, I'd say we've been vindicated on this point. And, finally, we argued that, in the long run, higher debt would harm the economy. By "the long run," I should note, we didn't mean "the third quarter of 2003." Alas, it was inevitable that the first quarter of rapid growth, whenever it came, would bring demands that tax-cut critics repent. Yet it's not as if Bush has brought about a particularly fast recovery. The debate wasn't over whether the tax cut would boost the economy; it was over how best to do so. The tax cuts are buying relatively little gain considering their enormous price.


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