As President Joe Biden and the Democrats struggle to get the “Build Back Better” agenda over the finish line, it is worth pointing out that they are really just doubling down on the failed policies employed during the Obama Administration.
Those policies led to the slowest economic recovery since World War II, according to CNN Money.
“The U.S. economy has only grown 2 percent a year since it bottomed out in June 2009. That’s far below the typical growth in rosy times of over 4 percent a year that the U.S. has experienced since World War II. It’s even below the rather sluggish rebound during President George W. Bush’s tenure of 2.7 percent,” the news outlet reported in 2016.
In fact during former President Barack Obama’s final year in office, the Gross Domestic Product grew at a paltry 1.7 percent.
That same year, a report by the Congressional Research Service compared the economic recovery under President Ronald Reagan in the 1980s from a recession early in his term to that under Obama.
The recessions were similar in severity, with the unemployment rate slightly higher in 1982 at its peak than during the Great Recession — 10.8 percent versus 9.9 percent in 2009.
“The economy is now 34 quarters into the current business cycle [in 2016], and real GDP has only increased by about 10 percent, in comparison to the 1980 business cycle in which real GDP increased by more than 30 percent after 34 quarters,” the report states.
Reagan’s response to slow economic growth was to slash taxes on businesses and individuals, which led to the largest economic expansion since World War II, causing unemployment to drop in half.
In 2009, as the nation was digging its way out of the Great Recession, Obama took the opposite tack by signing into law a nearly $800 billion stimulus bill (the American Recovery and Reinvestment Act), launching a massive new entitlement program in Obamacare and raising taxes on the “wealthiest” Americans in the name of at least paying for some of the new spending.
What followed was four years of $1 trillion-plus deficits for the first time in American history and the aforementioned slow economic growth.
What’s old — and failed — is new again under Biden, except he’s doubling down.
In March, the Democrats passed the $1.9 trillion American Rescue Plan Act. Now the president wants to launch a slew of new entitlements as part of his Build Back Better agenda, including taxpayer funded pre-K, rental assistance payments, expanded Medicaid benefits, enhanced child tax credit payments and climate change initiatives.
Of course, he wants to raise taxes on the “wealthy” and demands corporations to pay their “fair share” to help fund the programs. The wealthy, by the way, already pay a significantly greater percentage of the nation’s annual income tax revenue than other industrialized nations.
BIDEN: “I don’t want to punish anyone’s success. I’m a capitalist. I want everyone to be able to— if they want to be a millionaire or billionaire, to be able to seek their goal. But all I’m asking is: Pay your fair share. Pay your fair share. Pay your fair share.” pic.twitter.com/PL3rqX0Jvq
— JM Rieger (@RiegerReport) October 28, 2021
“Organization for Economic Cooperation and Development data show that the top 10% of American households earn about 33.5% of all earned income but pay 45.1% of all income taxes,” according to former GOP Sen. Phil Gramm of Texas and Mike Solon, a partner with U.S. Policy Metrics.
“In the last OECD study, in 2015, the top 10 percent of earners in the U.S. paid 45 percent of all income taxes. In France, the top 10 percent only paid 28 percent. In Germany they paid 31 percent and in Sweden 27 percent. Conversely, the bottom 90 percent of earners in the U.S. paid 55 percent. The bottom 90 percent of earners in France paid 72 percent. In Germany it was 69 percent and in Sweden 73 percent,” they wrote in The Wall Street Journal.
So enough with the “fair share” red herring already.
Regarding corporations, it should be noted, the tax cuts signed into law under former President Donald Trump in 2017 worked as advertised.
The nation experienced the lowest unemployment rate in 50 years prior to the COVID-19 shutdowns and was well on its way to recovery in January when Trump left office, with the unemployment rate down to 6.3 percent from 14.8 percent in April 2020.
Further, the Congressional Budget Office estimated earlier this month receipts to the federal Treasury topped $4 trillion for the first time in U.S. history during fiscal year 2021, with the Trump tax cuts still in effect.
Likely even more painful for Biden and his team to learn, the largest percentage increase in revenue came from corporate taxes, which were up 75 percent from 2020 to $370 billion, matching the record high of 2007, according to the nonpartisan Tax Foundation.
“In fact, corporate tax collections this year are about 25 percent higher than the $297 billion collected in 2017, prior to passage of [Tax Cuts and Jobs Act]. Likewise, as a share of GDP, corporate tax collections are higher this year (1.63 percent) than in 2017 (1.52 percent),” the Tax Foundation said.
The way forward to economic health could not be clearer: Keep the Trump tax cuts in place and reject a return to the failed Obama-era policies.