Even NY City is in the black...

OpinionJournal repeats an important fact: Our economy is strong and growing steadily, and this started with the Bush tax cuts. Especially important because we are bombarded with fatuous propaganda stating the opposite. A large percentage of drooling idiots (which, when it comes to economics, is a large percentage of the populace) actually believe that Bush "is bankrupting the country with a combination of aggressive military spending and reduced taxation of the rich." Believing such stupidity should automatically remove a person from the voting rolls, (and from the ranks of Republican Congressmen) but alas does not...

...The very fact that it is proving so difficult to secure a mere two-year extension of President Bush's most notable first-term domestic-policy achievement underscores how far Republicans in Congress have stumbled of late. The 2003 tax cut is about as clear a policy success as has come out of Washington in many years:

• The stock market has risen by about $4 trillion in value, and an estimated 40% of that gain is directly attributable to increases in the after-tax return on equities, thanks to the tax cut. (If the tax cut expires, the market will instantly give back those gains.)
• Housing values have soared so rapidly that the fear is we now face a bubble. Household net wealth has climbed by $10 trillion.
• Business investment--which had sunk into the abyss during the recession, falling by 21% between 2000 and 2002--has roared back to life. Spending is up nearly 25% over the past 30 months.
• Dividend payments to shareholders have doubled in two years, according to data gathered by the American Shareholders Association. The cumulative impact of the tax cut and the higher dividend payments has put $100 billion into the pockets of America's burgeoning investor class. The macro-economic signs all point to a solid, sustainable expansion.
• Employment is up 4.4 million and real GDP growth has averaged 4%--or twice the OECD average--since 2003. Today's unemployment rate of 5% means there are now roughly one million more Americans working than were projected before the tax cut.
• Oh, and yes, there was a $120 billion reduction in the budget deficit in 2005. That's because tax receipts rose by more than in any previous year in U.S. history, even adjusting for inflation. Receipts were up by $55 billion above projections in 2004; $122 billion above projections in 2005; and are already running well ahead of projections so far in fiscal 2006 (which began in October). •

Finally, we wonder if any of the faux debt-hawks in Congress noticed that thanks to the sizzling economy, states and localities are now running hefty budget surpluses, reversing years of red ink and painful service cutbacks. Even New York City--which for years looked like the U.S. version of debt-plagued Argentina--is back in the black....(Thanks to Betsy Newmark)

By the way, the percentage of taxes being paid by the upper brackets of income has been increasing for decades. Starting at least with the Reagan tax cuts. (I strongly suspect the Kennedy tax cuts had the same effect.) In fact, whenever you cut tax rates across the board, the "rich" end up paying more! (It's insulting to the high intelligence of RJ readers to explain why, but the reason is that, the higher your tax rate, the more incentive you have to eschew productive investment in favor of tax-avoidance schemes...or to just spend your money instead of investing it.)

Lower the tax rates, and investment is more attractive. And it is the poor who benefit most from this. The rich will still be rich either way, but the poor stand to gain jobs, raises, self-respect, and a chance to rise in the world, and to shed the welfare-dependency and weakness that results from "Democrat" policies..