Tax cuts and growth and the two parties | Michael Tomasky

David Leonhardt at the Times asks an excellent question: Why are we reflexively assuming in the current tax debate that extending the Bush tax cuts will be good for growth?

He then answers the question:

Those tax cuts passed in 2001 amid big promises about what they would do for the economy. What followed? The decade with the slowest average annual growth since World War II. Amazingly, that statement is true even if you forget about the Great Recession and simply look at 2001-7.

The competition for slowest growth is not even close, either. Growth from 2001 to 2007 averaged 2.39 percent a year (and growth from 2001 through the third quarter of 2010 averaged 1.66 percent). The decade with the second-worst showing for growth was 1971 to 1980 — the dreaded 1970s — but it still had 3.21 percent average growth.

The picture does not change if you instead look at five-year periods.

The slowest annual growth since WWII. Interesting. Leonhardt publishes a table showing GDP growth in five-year periods from 1956 to the present. As I perused this chart, I couldn't help but think who was president at which given time.

Let's call 3% GDP the cut-off between really strong growth and so-so or worse growth. It's a reasonable general figure to employ. And if we do we see the following:
1. 1960-1965, 5%; Democratic presidents
2. 1996-2000, 4.3%; Democratic president
3. 1976-1980, 3.7%; Democratic president
4. 1965-1970, 3.4%; mostly Democratic president
5. 1981-1985, 3.2%; Republican president
6. 1986-1990, 3.2%; Republican presidents

So those are the healthy periods. And now for the sickly ones:
7. 1971-1975, 2.8%; Republican presidents
8. 1956-1960, 2.6%; Republican president
9. 1991-1995, 2.6%; mostly Republican president (Clinton inheriting recession)
10. 2001-2005, 2.5%; Republican president
11. 2006-2010, .9%; mostly Republican president (Obama inheriting Great Recession)

See a pattern? Larry Bartels saw the same pattern with regard to wages and economic equality. Of course, these are just facts, and I'm well aware that facts don't mean much stacked up against really pretty rhetoric.

US economyDemocratsRepublicansMichael Tomasky
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