This past week the unemployment numbers were released and shocked many talking heads that it had broken 10 percent. 10.2 percent is the highest unemployment we’ve had since 1983. What blows my mind is that nobody, and I mean nobody, is asking what seems to be an obvious question: How did we recover from the 1983 recession? Are there any lessons to be learned from that robust recovery?
This paragraph in an AP article was the first thing even close:
The economy soared by nearly 8 percent in 1983 after a steep recession, Greenhaus said, lowering the jobless rate by 2.5 percentage points that year. But the economy is unlikely to improve that fast this time, as consumers remain cautious and tight credit hinders businesses. In fact, many analysts expect economic growth to moderate early next year, as the impact of various government stimulus programs fades.
The implication here is that the economy just righted itself with no external adjustments in 1983. Since we have stimulus running out, we can expect growth to actually flatten further next year. Why no investigation into what helped us drop 2.5 points of unemployment? Why no investigation into what caused 8 percent growth?
Simple. Tax cuts. A dirty word to Democrats especially when the evidence shows they worked.
In 1981, President Reagan signed a tax cut that dramatically lowered the marginal rates and other taxes. It let the country keep more of its money, which it promptly spent and invested kicking off one of the longest sustained periods of growth in the country’s history.
So, what are we planning on doing this time around? Oh, we’re spending like madmen! A huge stimulus bill that didn’t really stimulate. Attempting a huge health care bill that will only succeed in creating a huge bureaucracy. Attempting a cap and trade bill that will increase energy costs for everyone. But, what about tax cuts? Oh, they’ve talked about those, too. There are those Bush tax cuts that they will allow to expire next year.
That’s right. At a time of double-digit unemployment and a flattening economy, Congress has deemed it fit to increase income taxes. Wow. Brilliant.
Leave it to a Democratic Congress to ignore what works in favor of what gives the government more control.