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   deadmandeadman says June 10, 2007 -- EARLY in George W. Bush's presidency, liberal critics said: The economy is not growing. Which was true. He inherited the debris of the 1990s' irrational exuberances. A brief (eight months) and mild (the mildest since World War II) recession began in March 2001, before any of his policies were implemented. It ended in November 2001. In 2002, when his tax cuts kicked in and the economy began 65 months - so far - of uninterrupted growth, critics said: But it is a "jobless recovery." When the unemployment rate steadily declined - today it is 4.5 percent; time was, 6 percent was considered full employment - critics said: Well, all right, the economy is growing and creating jobs and wealth, but the wealth is not being distributed in accordance with the laws of God or Nature or liberalism or something. Last Sunday, eight Democratic presidential candidates debated for two hours, saying about the economy . . . next to nothing. You must slog to page 43 in the 51-page transcript before Barack Obama laments that "the burdens and benefits of this new global economy are not being spread evenly across the board" and promises to "institute some fairness in the system." Well. When in the long human story have economic burdens and benefits been "spread evenly"? Does Obama think they should be, even though talents never are? What relationship of "fairness" does he envision between the value received by individuals and the value added by them? Does he disagree - if so, on what evidence? - with Federal Reserve Chairman Ben Bernanke that "the influence of globalization on inequality has been moderate and almost surely less important than the effects of skill-biased technological change"? What Samuel Johnson said of Milton's "Paradise Lost" can be said of the debate's short discussion of economic matters: No one could wish it longer. Granted, the candidates had bigger fish to fry - one another, for their various positions on starting and ending the war. And the questioners set the debate's agenda. But if the Democrats had anything pithy to say about the economy, they would have said it. They have a problem. How do you exclaim, as Hillary Clinton does, that today's economy is "like going back to the era of the robber barons," and insist that the nation urgently needs substantial tax increases, in the face of these facts: In the 102 quarters since Ronald Reagan's tax cuts went into effect more than 25 years ago, there have been 96 quarters of growth. Since the Bush tax cuts and the current expansion began, the economy's growth has averaged 3 percent per quarter and more than 8 million jobs have been created. The deficit as a percentage of GDP is below the post-World War II average. Democrats, economic hypochondriacs all, see economic sickness. They should get on with legislating their cure. Twenty-three months after the next president is inaugurated, the Bush tax cuts expire. The winner of the 2008 election and her or his congressional allies will determine what is done about the fact that, unless action is taken, in 2011 the economy will be walloped: The five income tax brackets (10, 25, 28, 33 and 35 percent) will be increased 50, 12, 10.7, 9.1 and 13.1 percent, respectively, to 15, 28, 31, 36 and 39.6 percent. The child tax credit reverts to $500 from $1,000. The estate tax rate, which falls to zero in 2009, will snap back to a 60 percent maximum and exemptions that have increased will decrease. The capital gains rate will rise and the marriage penalty will be revived, as will the double taxation of dividends. Furthermore, the Alternative Minimum Tax was enacted by Democratic moralists in 1969 because 21 millionaires had legally avoided paying any income tax. The AMT, which allows almost no deductions, had one rate (24 percent) until 1993, when Democrats replaced it with two (26 percent and 28 percent). It has never been indexed for inflation and in the current tax year will hit almost one in five households - 23 million of them. Democrats need not confine themselves to their ritual tropes about how "the middle class is under assault" (Clinton again). They control Congress; they can act. The unemployed John Edwards, who has the luxury of irresponsibility, challenges Democrats to repeal the Bush tax cuts they disapprove of rather than wait for them to expire. Democrats cannot end the war (actually, they can but won't) but they can send their tax agenda to the president and dare him to veto it. They can but they won't. Do you wonder why? georgewill@washpost.com VIEW FULL ARTICLE >PAGE 1 bigger fish to fry - one another, for their various positions on starting and ending the war. And the questioners set the debate's agenda. But if the Democrats had anything pithy to say about the economy, they would have said it.

   Permalink posted 06/10/2007
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   Spike says "Gimme Some Truth" has always my favorite John Lennon post-Beatles song, for unexplainable musical reasons. The fact that I never noticed anyone ever noticing it helped. Now finally someone notices it! A soulmate!

   Permalink posted 06/10/2007
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   deadmandeadman says Love George's exquisite guitar.

   Permalink posted 06/10/2007
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   dermahrk says Gee, I'd love to comment but I'm late for my $400 haircut. Bye!

   Permalink posted 06/10/2007
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   Spike says Imitating Edwards is the sincerest form of flattery. (Not fair, Spike!) Sincere egalitarians never ever spend too much on their appearance when campaigning.

   Permalink posted 06/10/2007
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   RGM says Awe this again, glad I don't live in a big city anymore....thanks for the post buddy... ;)

   Permalink posted 06/10/2007
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   ivylander says I've never heard anyone blame the Democrats for the AMT before, or (by inference) the 2000 tech bust, which is what hamstrung the economy for several years. (Is the suggestion that a Republican would never have allowed all that "irrational exuberance"?) In any event, if the AMT has become such a horrible thing - and I agree that it is, because as you rightly point out it has never been adjusted for wage inflation - then I would have thought that the Republicans who were in control of Congress for the past six years would have done something about it. I'm not carrying water for the left here - I believe them to be every bit as disingenuous on economic reform and income inequality increased on Clinton's watch, though not at the same rate - but it's just not fair to blame them for lots of things that are wrong with our economy. Like the fact that, in real terms, taxes on the middle class have increased since 1970, even with the current tax cuts, while taxes on the wealthiest tenth of a percent (households making $1.5 million or more annually) have been cut in half. (Two independent economists - not government agencies - crunched the numbers.) In light of that, what does the term "substantial tax increases" really mean? Substantial for whom? And how much would they have left over if these increases were to go into effect? Here's something else worth considering: according to the Christian Science Monitor, a recent Northwestern university study found that "the richest of the rich, the top 1/1,000th, enjoyed a 497 percent gain in wage and salary income between 1972 and 2001. Those at the 99th percentile, who made an average $1.7 million per year in 2001, enjoyed a mere 181 percent gain." Compare that with the Congressional Budget Office finding that "between 1979 and 2003, the top 1 percent of households enjoyed a 129 percent gain in after-tax income after inflation. That compares with 15 percent for the middle one-fifth of all households and 4 percent for the bottom fifth." This is not a partisan problem. Is there any reason to believe that income inequality hurts America? Not unless you're concerned that the U.S. presently has the highest infant mortality rate and one of the lowest life expectancies of any developed nation. (These are statistics that speak, generally, to a nation's treatment of its poor.) Or unless you go along with the widely accepted historical observation that societies in which income is unequally distributed become corrupt societies. I'm with you in believing that the right is not consciously waging "an attack on the middle class," and that to engage in that kind of rhetoric is blatant demagoguery. It's as bad as the demagoguery that has sprung up around the issue of immigration. But we've talked about that already.... I do believe in equality of opportunity - if you're given a chance and you screw things up, there goes your chance. But let's be realistic about the way the world works. The haves are totally in control right now, and they are using all the means at their disposal to stay in control. As a result of that, a huge, and increasing, number of Americans are not getting their opportunity to prosper in this country. But Will clearly thinks things are pretty good....

   Permalink posted 06/11/2007
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   Girlcrawl says Perfect musical selection to accompany the post - it was a stimulating read. Must admit that I agree with the George Will retort to Obama's promise to “institute some fairness in the system.” Sadly, when US politicians begin legislating fairness, America's 'middle-class' never seem to benefit from the instituted policies.

   Permalink posted 06/11/2007
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   deadmandeadman says "because as you rightly point out it has never been adjusted for wage inflation – then I would have thought that the Republicans who were in control of Congress for the past six years would have done something about it" The republicans passed the tax cuts. It was assumed they would be made permanent, they saw no neede to act om the AMT.

   Permalink posted 06/12/2007
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    ivylander says That doesn't quite make sense to me. With each succeeding year, more and more people have been hit with the AMT. This has happened although Bush's tax cuts have been in effect. In fact, we have an either/or situation here: Either you pay the "regular" tax rate or the AMT rate, whichever is larger. Regular tax rates have been dropping, but the AMT rates have not. So, if the first is continually being lowered while the second stays the same, then in fact the lower tax rate is directly responsible for more people qualifying for the AMT. i would think the opposite - that lowering the regular tax rate would make it imperative to change the AMT as well.

    Permalink posted 06/12/2007
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    Cody B says If the tax cuts were permanent how would we be able to pay for our additional border gaurds, and build our military, and offset corporate welfare payouts.

    Permalink posted 06/14/2007

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