Heard on the Cable: How the Bush Tax Rates Killed Demand & Created Unemployment

Last night, during insomnia-driven, late-night (early-morning?) viewings of CNN's Parker Spitzer and MSNBC's Ed, I heard variations on a theme. The Bush tax cuts, don't know you, especially the cuts for individuals making over $200,000 and households pulling down more than $250,000 have always been a disaster and led to the long breadlines that formed in America immediately upon the resolution of Bush v. Gore.

On Ed, admitted serial soap stealer Michael Medved was defending the extension of the Bush rates to everyone come January 1, 2011. Part of his argument was that it's the wealthier segments of the population are the ones who invest in businesses that create jobs, etc. To which the eponymous host yammered on about how those cuts in particular and the Bush years in general were a disaster for regular folks who couldn't find jobs.

On Parker Spitzer (full disclosure: I've been on the show and think it's pretty darn swell) former New York governor and co-host Eliot Spitzer challenged Americans for Prosperity jefe Tim Phillips to explain why banks and businesses were sitting on some $2.5 trillion worth of cash rather than giving it out. As is his Keynesian wont, Spitzer said that it was lack of demand and that only the government could fill the gap, by taking the $70 billion or so that might be gained annually by reverting to Clinton-era tax rates on the wealthy and using it to stimulerate the economy back into maximum overdrive.

There's no question that George W. Bush presided over a craptacular job-creation record, especially if you care about private-sector employment. As Reason columnist Veronique de Rugy wrote at The Corner:

Under Bush, private employment shrank by 673,000 jobs, federal employment grew by 50,000 jobs, and government employment grew by 1,753,000 jobs.

It's also true that the unemployment rate under Bush (2001-2008) was pretty damn low, too, peaking at 5.99 in 2003 (the last gasp of the tech bubble's bursting).

There are many things to complain about from the Bush years. Even the least inattentive reader or guest to this site should recall our continuing litany of them. I'm not sure that the unemployment rate is one that rises to the top. I am certain that Bush's wild spending—isn't government spending supposed to return $1.50 for every buck that goes out the door?—is at the very top of his economic FUBARs. And that doubling or tripling down on even more stimulus spending "to spur demand" makes about as much sense as drinking yourself sober.