Center for American Progress

RELEASE: Bush Tax Cuts responsible for the Debt Frenzy in Washington
Press Release

RELEASE: Bush Tax Cuts responsible for the Debt Frenzy in Washington

Even With Two Wars and Two Recessions, Debt Levels Would Have Been Sustainable Without the Bush Tax Cuts

Washington, D.C.—Ten years to the day the Bush tax cuts became law, we can measure the direct impact on the federal debt, and the picture would be far less bleak without those tax cuts argue Michael Ettlinger and Michael Linden.

Without the Bush tax cuts, the U.S. debt as a share of GDP would be smaller than 50 percent this year, even after all the other fiscal shocks of the past decade, and the country’s balance sheet would be better in the long term as well, with total debt as a share of GDP below 60 percent for the rest of the decade.

“Bush’s ‘supply-side’ tax cuts were a complete failure as economic policy, and now, instead of being debt free and well prepared to care for an aging population, our debt-to-GDP ratio is almost 70 percent,” write Ettlinger and Linden.

As the country makes its next biggest fiscal decisions, such as raising the debt limit, the harsh consequences of the Bush Tax Cuts have to be weighed. Financial markets’ reaction to not raising the debt ceiling could be of great consequence, but more importantly freezing the debt would result in an immediate withdrawal of billions of dollars of economic activity from the economy that would rapidly affect businesses nationwide.

To view the full article, click here.

To speak with Ettlinger and Linden about the Bush Tax Cuts and the implications on the federal debt, contact Megan Smith at 202-741-6346 begin_of_the_skype_highlighting            202-741-6346      end_of_the_skype_highlighting or [email protected].