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Does Hillary Really Think the Bush Tax Cuts Caused the Great Recession?
There were two reality-challenged economies theories presented at last night’s presidential debate. Donald Trump reiterated his theory that the US has been on the skids for 40 years and trade agreements are to blame. It’s more likely most Americans are far better off than they were in the 1970s, and trade is one reason why.
Hillary Clinton had an economic theory of her own. Talking about Trump’s tax cut plan, Clinton said, “Trickle-down did not work. It got us into the mess we were in, in 2008 and 2009. Slashing taxes on the wealthy hasn’t worked.”
This is not a new argument from Clinton, one she mentioned in her presidential announcement speech last year:
We’re still working our way back from a crisis that happened because time-tested values were replaced by false promises. Instead of an economy built by every American, for every American, we were told that if we let those at the top pay lower taxes and bend the rules, their success would trickle down to everyone else. What happened? Well, instead of a balanced budget with surpluses that could have eventually paid off our national debt, the Republicans twice cut taxes for the wealthiest, borrowed money from other countries to pay for two wars, and family incomes dropped. You know where we ended up.
But wouldn’t the George W. Bush tax cuts — most of which President Obama extended — have stimulated demand and/or improved supply-side incentives to work, save, and invest? And a 2012 study, “Does Inequality Lead to a Financial Crisis,” found “strong evidence linking credit booms to banking crises, but no evidence that rising income concentration was a significant determinant of credit booms.” Also, the official Financial Crisis Inquiry Commission report assigned blame to banks, regulators, government agencies, and credit raters — not the 2001 and 2003 Bush tax cuts.
That being said, it is not surprising Clinton is making this argument. It is, in effect, “Trump wants to replay the same policies that almost destroyed the US economy, but more so.” Fewer and fewer people remember the Reagan boom or how better supply-side policy contributed to economic growth during Bill Clinton’s presidency. Any Republican who ever proposes tax cuts for the wealthy and business is likely to see some version of Clinton’s argument. Trump didn’t have much of a response other than to asset his tax cut “will create tremendous numbers of new jobs.”
Published in Economics
Since there is no such thing as “trickle down” economics in the first place, it’s no surprise that “trickle down” doesn’t work.
Here’s a newsflash unicorn rainbow economics also doesn’t work. It doesn’t matter if there is no unicorn rainbow theory, I’m telling you it doesn’t work!
Beyond that though, any hint that the tax cuts had an impact on the housing bubble is by and large an economic myth credit by leftist, to help their personal belief in statism. For the truth is, it’s largely these statist policies that lead to the housing boom and bust. Especially with regards to the government forcing banks to lend to people who could not pay their loans back.
Please
Hillary does not care about the effect of economic policies, She will parrot anything to win. Once in office, she will reward those who help(ed) her and take from those who did not.
Pretending that she has any opinion on economic theory is laughable.
I suspect that She does not believe tax cuts were the cause of the 2008 credit collapse. I doubt she has cared much about why so much as how she can frame it to her advantage. The phrase “Trickle-down economics caused the Great Recession” has a comfy left-wing truthiness to it. Kind of like the sun revolves around us on a flat earth. It is really easy to believe because it fits what we un-intensively observe.
Not to worry. The MSM fact-checkers will be all over this nonsense.
Lets hope they discover the Laffer curve :-)
JamesP,
Hillary is Robo-Democrat. Trickle-Down, Tax Cuts for the Rich, Wealth Inequality. Never have I heard anybody rattle off such a banal monotone of left-wing cliche nonsense.
Whatever she believes she is totally craven.
Regards,
Jim
This one is already lost. Since before Obama became POTUS, the MSM, Jon Stewart, Bill Maher, the school systems, etc have been teaching the public that HRC position is correct. Like climate change the science of it is no longer up to discussion. HRC is not presenting a new point of view as much as reminding people what they already know to be true.
She might have political opinions but they would be irrelevant to her power-lust.
It was an honest mistake. She just confused George W. Bush with Barney “The Banking Queen” Frank …
And she forgot, or had no recollection, of the 2004 Congressional Hearings on how to address and avoid the coming Mortgage Crisis ….
“Any Republican who ever proposes tax cuts for the wealthy and business is likely to see some version of Clinton’s argument. Trump didn’t have much of a response other than to asset his tax cut “will create tremendous numbers of new jobs.”
That is correct only because Republicans never explain why tax cuts are necessary. Trump should have been all over Hillary’s nonsense but wasn’t because he apparently doesn’t have a firm grasp of the economics.
The facts are that America has one of the most if not the most progressive tax rate structures on income in the world. Because the rates are so progressive high – often cumulatively with state taxes well over 50%- there is very little incentive to invest to gain greater income. Instead high income people will often people look for investments that will give them higher after tax income even though these investments often make substantially less income and are not necessarily good for the economy. The result is that at these rates, higher tax rates on the wealthy generate less often substantially less revenue not more. That needs to be repeated over and over. Higher revenue has shown over and over again to correlate more with higher growth, not tax rates in the last few decades.
Small business and business start-ups are starving for capital. Increasing tax rates only makes a disastrous situation only worse.
Republicans and conservatives need to be unafraid to tell the truth about higher taxes.
As sort of a preamble to his question about prosperity, Lester Holt repeated the Administration lie that the economy is doing extremely well, with a litany of the phony stats that it and the Fed have been using.
17 million people have left the work force, or more correctly have been dropped officially from being in the work force for statistical purposes since the beginning of the Obama Administration. Tens of millions are barely surviving beyond that. This is a unbelievable disaster, plain and simple. Never in modern times has there been such a dismal economic performance of any administration.
Male and Black employment percentage wise has never been worse since such things have been recorded.
The Fed has painted itself into a terrible corner where it must raise interest rates to save the insurance companies and pensions, but can’t because raising rates would cause unbelievable depression like carnage in the bond, stock and real estate markets.
Under Obama our national debt ratio has climbed to Greek and Cyprus like heights, where only the fact that the Chinese, Japanese and the Euros are doing virtually the same thing has kept us from full financial calamity.
Trump if he really had any real guts would have been all over Lester Holt for such a bald faced lie. But he let it go, giving Hillary free rein to tell America her lies. At this point, we desperately need the truth, not fear to tell the full truth about the economy.
Real “trickle down” economics is what Hillary and the rest of the left propose. Hand over 50% – 75% of your income to the state and, after they have squandered the majority of it, some may trickle down to you in the form of government services.
A little ‘fact checking” for Hillary.
In the first six years of his presidency where stats are available, Buraq Obama with some of the highest effective tax rates ever could only manage to take in 15.6% of GDP in revenue – the lowest percentage by far of any President since the early 1950’s.
Ronald Reagan – that evil man who gave vast tax breaks to the undeserving rich with tax rates for the wealth and middle class at much lower levels- somehow managed to get 17.7% of GDP in revenue.
Adding insult to injury, GDP grew at a paltry 1.46% during the presidency of Obama while again that “evil” Ronald Reagan -who we all know absolutely destroyed the economy -somehow managed to get GDP to grow at a very solid 3.5%. The net result is that revenue barely has grown under Obama while revenue grew close to 30% under Reagan.
All this terrible ‘fact checking” would seem to point to the hoary conclusion that the “Laffer Curve” actually is correct and that revenue will grow more and faster with lower tax rates in a highly progressive highly taxed tax structure environment.
The cause of the financial crisis was Clinton public policy regarding housing, namely forcing banks to make subprime loans, and incentivizing Fannie and Freddie to aid and abet that policy. The financial geniuses on Wall Street managed to concoct financial instruments to hedge their own risk in this fragile by design system, regulators bought in to the fiction that subprime lending was nirvana, the ratings agency sold a bill of goods on the legitimacy of all of this, George Bush failed to put a stop to the Democrats subprime madness, aided and abetted by such as ACORN and Anthony Mozilla who bribed Dodd, et. al wth sweetheart mortgages, and Hank Greenberg was ousted from AIG by Spitzer so AIG could add gasoline to the fire with credit default swaps, which Greenberg refused to allow, and the stage was set for the financial collapse. Then Obama made sure we would never get the economy going again with massive deficit spending, the Fed joined in with quantitative easing, which is still with us, ad libitum and ad aeternum, and now we can’t get out of our situation because to do so would require raising interest rates that will bankrupt the federal government and tank the stock market. Talk about a “liquidity trap”. All thanks to Bill, Hillary, the Democrats, and the Wall Street financiers who love them and depend on them and finance their life-styles of the rich and famous. The Bonfire of the Vanities continues to burn bright.