GOP tax cuts caused the Great Depression. Will Bush's cause another one?

[w4rma]

Wealth Inequality Charts

…
The Great Depression brought an end to GOP tax cuts. Faced with a ballooning deficit, President Herbert Hoover proposed a major tax increase, including new excise taxes and a broader, somewhat steeper income tax. In a striking display of bipartisanship, Democratic leaders embraced the plan. They even went Hoover one better, trying to replace the regressive excise taxes with an even more regressive national sales tax. It was a major reversal for the party, which had long opposed any sort of sales tax. It was also a huge blunder, prompting a revolt among rank-and-file Democrats. When the dust finally settled, lawmakers agreed to a host of new excises, as well as steeper, somewhat broader income taxes. Widely considered both prudent and distasteful, these changes constituted the largest peacetime tax increase in the nation's history. For Republicans, the law brought an unhappy end to Mellon's long campaign for tax reduction. For Democrats, it established the regressive starting point for New Deal tax reform.
…
Tax cuts were the order of the day -- and the decade -- throughout the 1920s. Taken together, the Revenue Acts of 1921, 1924, 1926, and 1928 lightened the burden for almost everyone. Wealthy taxpayers did particularly well, enjoying a steep decline in marginal rates; between 1918 and 1929, the top rate fell from 77 percent to just 24 percent. Meanwhile, many middle-class Americans disappeared from the tax rolls altogether, as Congress narrowed the income tax to focus on the well-to-do. Perhaps most important, the business community managed to orchestrate repeal of the excess profits tax -- the most progressive, and burdensome, tax to emerge from World War I.

On the eve of the Great Depression, the revenue system featured a narrower, flatter individual income tax, as well as a modest corporate income levy. Despite the best efforts of Treasury Secretary Andrew Mellon, it also included an estate tax; Democrats and progressive Republicans had managed to stave off his call for repeal, although they agreed to substantial rate cuts. Mellon could console himself with broad success in almost every other facet of his tax cut program. Dominating fiscal policy for more than 11 years, he reshaped the tax system along new, distinctly less progressive lines.
…
http://taxhistory.tax.org/Articles/1920s.htm

The more things change, the more they stay the same.

[jeter]

1. look at Carter's numbers

Carter did better than every GOP Pres since Harding.

[forgethell]

4. I lived through

the Carter era. I don't give a flying flootie what the numbers show, it was a catastrophe, and, I think, the major reason Raygun got elected. There are three kinds of lies, lies, damn lies, and statistics.

[Terran]

7. Be specific

What, exactly, was such a catastrophe about the Carter years? Name something that you blame completely on him and his policies.

[bobbieinok]

9. interest rates were very high

15-20%

People with certificates of deposit made LOTS of money; when rates started coming down these people were shell-shocked.

If you didn't have money to invest, everything was very expensive. I think this was when they started doing variable home mortage rates and balloon payments.

I think there was some suspicion that there was manipulation of the economy to elect a republican.

[forgethell]

12. Interests rates were very high

My redit cards went over 20%. Before that, the highest was 12%. Inflation was rampant and wild. Ever hear of "stagfaltion"? No? I'll let you research what exactly it meant, but the term was coined in Mr. Carter's day to describe an economy that was a) stagnant and b) inflationary.

The soviets surpassed us in military might in Carter's day, too. That may not have been a bad thing, except then they started acting like imperialists.

do you need any more?

Jimmy's heart may have been in the right place, but his performance was lousy, and that is the truth, much as I hate to have to say it.

[ieoeja]

13. Inflation

Inflation jumped through the roof during Nixons presidency and continued rising until 1979. In 1980 inflation dropped to the levels we see today.

The Soviets never surpassed us in military might. They never even came close. That WAS a major campaign theme for Reagan, but was no more true than the "two divisions would have to report not fit for duty" theme in the 2000 presidential campaign.

Militarily the National Security Agency did hate Carter's move away from supporting the enemy of our enemy. Some of those analysts have since changed their opinion, having decided that, though it cost us in the short term, it seemed to have benefited us in the long.

Like just about every president, he has a few military victories to his credit. With Somalia and Ethiopia already communist, hardliners criticize Carter for "allowing" Yemen, and therefore the southern entrance to the Red Sea, to fall into communist hands. These hardliners ignore what was probably Carter's greatest military victory, the counter-revolution (supported by a force of US Marines) that divided Yemen in half with the pro-western government controlling the Red Sea shore.

And to all of you guys in Delta Force, I hope you realize Delta was created at the insistence of President James Earl Carter when he asked the Pentagon to rescue the hostages in Iran and the Pentagon responded, "we don't do that sort of thing".

[sandnsea]

14. On jobs - baby boomers

Carter was creating jobs, there was just too damn many boomers. It was tough, I lived through it too. And regardless of interest rates, which wasn't due to anything Reagan did anyway, things didn't get much better in the 80's. I never thought we'd have an economy remotely like the 90's again. We can have it today too, it's all wrapped up in tax policy and federal investment in new technologies, infrastructure and support of local services. The Republicans will never do it and that's why we'll never have a truly thriving economy under them.

[alfredo]

2. Great find!

It is now on its way to all people on my mailing list and to all BBS's I crawl.

[LoneStarLiberal]

3. Something Gloomy This Way Comes

I try to avoid thinking about the economy, both ours and the global economy, as much as possible.

With this deep, almost bottomless sea of debt we are floating on right now, the insane rate at which we continue to pump more and more debt gleefully into the morass, the shakt trade and shaky dollar policies of the Bush administration, and my belief in long cycles in global economics, I think something very, very bad is going to happen in the next 10 years.

Something bad enough that we will yearn for the last two years or for 1987, something along the lines of and worse than the Great Depression.

This sea of debt on which nations, corporations, and individuals are floating is gasoline, and we're drunkenly juggling lit matches.

[maggrwaggr]

5. insider selling is at highest level in more than 3 decades

Not exactly good news. Check it out (gotta scroll down a bit):

http://moneycentral.msn.com/content/CNBCTV/Articles/Dispatches/P66026.asp

[pansypoo53219]

6. if not for greenspan

we would have been in a depression.

[banana republican]

8. Recession/depression

The general consensus about the depression was that too much money was concentrated in too few individuals. That is to say, that there was nobody left to buy what the moguls of industry produced. Without a vibrant middle class able and willing to purchase goods and services the economy falls apart.

This is the problem that every republican administration since Nixon has faced. By giving tax breaks to their wealthy patrons they have triggered recessions every time. The key issue about republican tax cuts is that they concentrate wealth in too few individuals and create a depressed economy.

The question of tax cuts needs to be recharacterized, not interms of rich vs. poor; but rather in terms of our national defense. This was one of the major selling points behind the "New Deal" of FDR. Individuals who were drafted during the early years of World War II were under nurished and unable to serve in the military for health reasons. Inorder to provide for a strong defense FDR created programs to provide for food and health care so they would be able to serve in the military.

Democrats need to think of the economy in the same way. Inorder to protect the United States it is necessary to have a strong economy. Inorder to have a strong economy tax breaks should go to the middle classes.

[kentuck]

10. Same friggin' arguments as today !

Does anyone ever read history?

[areschild]

11. They already have.

I'm Greatly Depressed, with no relief in sight until this scumbag misadministration is out of OUR WH.