"I certainly would not claim that tax cuts pay for themselves."
-- Edward Lazear, Chair of the Council of Economic Advisers
That comment is an observation on the supply-side argument that tax cuts mean more government revenue because lower rates encourage people to work more, thereby raising their income and the accompanying taxes.
Yeah, I know after every tax cut in my life, I've asked my bosses to pile on the work.
My anecdotal employment/tax experiences aside, a recent article in the Christian Science Monitor examines why we're still waiting for the economic boost expected from the Bush tax cuts.
In addition to citing Lazear, the man who currently heads the panel charged with providing the prez with objective economic analysis and advice on a wide range of domestic and international economic policy issues, the newspaper picked the brains of folks across the political spectrum.
Waiting for the tax benefits: One of the experts was economist Paul Kasriel of Northern Trust Co. in Chicago. Kasriel says he still can't detect the promised big boost in national output, investment and savings from the GOP's latest supply-side tax cuts.
With a recession under way when the first round began in 2001, the tax cuts
Maybe the economy would have performed worse if taxes hadn't been cut, said Kasriel. But so far, gross domestic product growth in the current recovery has been the slowest of any expansion since 1961, slightly slower even than the record-long expansion that began in 1991.
Oh, by the way, notes the Monitor, during the expansion period, Dubya's dad and Bill Clinton raised taxes.
But wait, there's more: True tax-cut believers, however, call for patience.
J.D. Foster, an economist at the conservative Heritage Foundation, says in the article that the most important supply-side tax cuts on capital gains and dividends didn't go into effect until 2003. They just need time to work through the whole system.
The obvious questions: How much more time? And do we have it?