Bush vs. his economists III

President Bush claimed yesterday that recent revenue growth proves that cutting taxes reduces the deficit:

Some in Washington say we had to choose between cutting taxes and cutting the deficit. You might remember those debates. You endured that rhetoric hour after hour on the floor of the Senate and the House. Today's numbers show that that was a false choice. The economic growth fueled by tax relief has helped send our tax revenues soaring. That's what's happened.

But as CBPP points out, this claim, which has been repeated over and over by the administration since 2001, is false -- indeed, it is disproven by the administration's own analysis in the Mid-Session Review released yesterday:

The Treasury analysis concludes that making the President’s tax cuts permanent — and paying for the tax cuts with future reductions in spending — may ultimately increase the level of economic output (national income) in the long run by as much as 0.7 percent... [T]he effect of this assumed additional economic growth would be to offset only a tiny fraction of the cost of the President's tax cuts. For instance, a 0.7 percent increase in the economic output that the Congressional Budget Office has projected for 2016 would represent an additional $146 billion. If new revenues equaled as much as 20 percent of the additional output, the increase in revenues resulting from making the tax cuts permanent (assuming Treasury’s best-case assumptions) would be $29 billion. That amount represents less than 10 percent of the $314 billion that the Joint Committee on Taxation estimates extending the tax cuts will reduce revenues in 2016...

In short, even Bush's own economists don't believe this nonsense.

Does that sound familiar? It should -- I wrote the same thing twice at Spinsanity. First, in February 2003, I showed that the 2003 Economic Report of the President "directly contradicts a number of public statements by the President and other administration officials on two key economic issues: the effects of tax cuts on revenue and the relationship between budget deficits and interest rates." Then, in May 2003, I described how "President Bush is again being contradicted by [his Council of Economic Advisers] and his nominee for chairman of the council, N. Gregory Mankiw, on the date a recession began in 2001, the revenue effects of tax cuts and the number of jobs that would be created by his tax cut package."

We know the White House dislikes experts and shuns membership in the reality-based community. But to make a claim about a new report that your experts contradict in the report is chutzpah indeed.

Comments

[Jay Rosen]

Brendan: I certainly agree that to "make a claim about a new report that your experts contradict in the report is chutzpah indeed," but I think you have to see it as "strategy indeed." You're studying politics-- study this!

It's a hew kind of political strategy based on the insight that if you do make a claim like that, and you don't have to back off because the forces do not exist to make you, then you have, in a way, demonstrated your Administration's power "over" reality, and you can roll over other realities, other people, that way.

What if this method Bush has is a basic tool of governing? I think it is. Not a bug, a feature.

This is combined with another strange fact about the Bush White House. It is organized to make sure that a lot of "contrary" information never reaches Bush, which is the way he wants it. You have to re-draw the whole notion of "White House deliberations" for this group.

I don't think political scientists have any "rational actor" theories that truly explain Bush 43. Do you?

[Brendan Nyhan]

I posted my reply to Jay as a new post here.

[Brendan Nyhan]

Note to readers who followed Brad DeLong's link to Jay Rosen's comment above -- I hope you'll scroll up to read the post, and follow the link to my reply to Rosen.