It seems to me that if one wants to argue about the effect of Bush's tax cuts on federal revenue, then one should compare receipts that were impacted by the tax cuts before and after they were put in place. IOW, comparing total federal receipts is bogus because that includes FICA and all the other taxes that we pay - we should be looking at income tax revenues. (FICA's income limit has been [link|http://www.ssa.gov/OACT/COLA/cbb.html#Series|going up] substantially.)

Also, many of Bush's tax cuts began in 2001, making the first chart misleading.

[link|http://www.cbpp.org/10-21-03tax.htm|Center on Budget and Policy Priorities] (from 2003):

The final budget figures for fiscal year 2003 were released on October 20 by the Treasury Department. They indicate that income tax receipts (including receipts from both the individual and corporate income tax) equaled just 8.6 percent of the Gross Domestic Product. This is the lowest level of income tax collections, as a share of the economy, since 1942. The decline in income taxes as a share of the economy to a level last seen six decades ago helps explain several other key findings about the final budget tally.

[...]

(I haven't been able to find similar data for a later period.)

[link|http://www.cbpp.org/1-31-07tax.htm|CBPP]:

The President and members of the Administration routinely argue that the tax cuts have produced a robust economic expansion and should therefore be made permanent for the sake of the economy. This argument does not withstand scrutiny.

Every recession in modern U.S. history has been followed by an economic expansion, regardless of whether taxes were cut, increased (as in the early 1990s), or left unchanged. The recent tax cuts were not responsible for the current recovery, just as the tax increases of 1990 and 1993 were not the reason the economy recovered from the downturn of the early 1990s, instead of remaining permanently stagnant.

Moreover, compared with other post-World War II recoveries, the current recovery is not an exceptional one, and by some measures is well below average. If tax cuts are crucial to economic growth, then the current recovery should stand out brightly in comparison to previous recoveries. It should certainly outshine the comparable years of the 1990s recovery, which followed two significant tax increases. Instead, economic growth has been weaker during the current recovery than during the average post-World War II recovery and about the same as during the comparable years of the 1990s recovery. Investment growth has been notably weaker in the current recovery than during the average previous recovery and the recovery of the 1990s, and employment and wage and salary growth have been especially weak. Employment growth during the current recovery has been slower than during any prior post-World War II recovery.[3]

Emphasis added.

FWIW.

Cheers,
Scott.

[link|http://z.iwethey.org/forums/render/content/show?contentid=248099|#248099].

Coming around to [link|http://z.iwethey.org/forums/render/content/show?contentid=146800|my way of thinking], eh?

;-)

Cheers,
Scott.

Someone on NPR this morning said that he thought that there hadn't been a recession this time (as opposed to 1973-1974, 1991, etc.) because the Federal Reserve hadn't assumed that inflation was going to go out of control and increased interest rates. I wouldn't be surprised if that was also a major factor. 0% interest rates for car purchases certainly helped keep things moving for quite a while.

Lots of things were happening in earlier oil price spikes that contributed to those recessions (Watergate, Iran hostages, etc., etc.). We've been "lucky" that many factors are helping to mitigate the effect on the economy this time around (especially easy money for one). While we can argue the importance of Bush's tax cuts, we can't ever really know. Color me skeptical, though.

I think that eventually $80+/bbl oil is going to do bad things to us. Whether we'll muddle along for another 6 months or 3 years, I obviously can't say. As you and others have noted, developing countries like China may be hurt more than the US if prices keep climbing.

It doesn't look like the factors keeping the price high this time around are the same as in the past - there's not additional production that's coming on like to take power away from OPEC as there was in the 1980s, and demand is rising very rapidly now.

The overall trend since late 2004 doesn't look too promising to me:

[image|http://www.bea.gov/briefrm/gdp.gif|0|Real GDP Growth in USA|472|641]

[image|http://www.wtrg.com/oil_graphs/oilprice1947.gif|0|Oil prices in constant 2006 dollars|600|800]

(Oil crossed $30/barrel somewhere in 2003-2004.)

So, in terms of the post-1973 oil price spikes, this has been an "exception" in some respects. The trouble is, as always, comparisons to the past are imperfect.

We'll see.

Cheers,
Scott.