“If a tax cut increases government revenues, you haven’t cut taxes enough.” –Milton Friedman
As the late Mr. Friedman explained, when you cut taxes for the achievers and high income earners, you make it easier for those achievers to create more new money. As a result, the government ends up collecting even more money under a lower tax rate.
The Bush economy continues to prove this theory correct but you’d never know it from reading most American newspapers. Heritage Foundation’s Robert Bluey: All the Bad News That’s Fit to Print
The U.S. budget deficit fell to the lowest level in five years last week, but three of America’s leading newspapers — the New York Times, Washington Post and Los Angeles Times — couldn’t find the space to mention the dramatic drop.
Journalists who have spent years trashing President Bush’s tax cuts appeared to suddenly lose interest when the budget picture brightened. That’s not surprising, however, considering that mainstream reporters frequently ignore upbeat economic news…
Despite the pessimistic attitude of the press, the U.S. economy keeps ticking. Last week’s encouraging news about the deficit was another indication that the economy is prospering thanks to Bush’s tax cuts, which encouraged economic growth and, as a result, brought in higher revenues to the federal treasury…
The deficit now stands at $163 billion or 1.2 percent of the economy. That’s half of the 40-year average of 2.4 percent of gross domestic product (GDP). By comparison, during former President Ronald Reagan’s administration, the deficit averaged 4.2 percent of GDP.
For three consecutive years under Bush, the deficit has fallen by $250 billion, putting the federal treasury on course for a surplus in 2012.
Tom Blumer at Newsbusters: “Does anyone seriously believe that the news would have been almost completely ignored if the deficit had instead gone up?”
More economic news:
- 166,000 news jobs created in October, twice as many as expected.
- October marks a record 50th consecutive month of uninterrupted job growth.
- Unemployment at 4.7%, “a figure considered low by historical standards“.
- Real disposable income up 4.1% over the past year (see chart).
Update: a correction was added to the above article stating that the New York Times did in fact run a 96-word AP report on the deficit.