Don't just credit Reagan and Bush - Kennedy also slashed taxes to revive the economy and boost receipts and Clinton also boosted an already good economy into a fantastic economy when he agreed to sign off on tax cuts (admitting that he raised them too much - maybe we should have bubba hang around the oval office with the tyro - at least when the interns aren't around). Plus, we have the benefit of a recent negative example, HW's mistake of raising taxes.

Not that the current crop of Democratic leaders will choose to anything as stupid as learn from blatantly successful history lessons. After all, some people will benefit more from tax cuts (namely those greedy bastards that earn money and pay taxes, damn them!).

The political pendulum continues to swing back and forth. No one should be excited for any party having a lock on both the Executive and Legislative branches - whether Republican or Democrat. Today's Fed statement certainly does not bode well for the economy going forward, so perhaps we have some televised Congressional hearings on Theories of Political Economy to look forward to...

http://deltahedged.com/

Tax cuts are proved, FDR was a failure -- nuff said.

Obama's Raw Deal II will likewise be an even bigger failure.

Hugh, despite the recent awful economic events, I see you you are still banging the drum of tax cuts and supply side economics - an economic theory which holds that reducing tax rates, especially for businesses and wealthy individuals, stimulates savings and investment for the benefit of everyone, also called trickle-down economics as your panacea.

But it is precisely those supply side policies that have brought us to the edge of the abyss. If you don't believe me that is fine but read Nobel economic prize winner Joseph Stiglitz..The Economic Crisis. Capitalist Fools..

Behind the debate over remaking U.S. financial policy will be a debate over who's to blame. It's crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakes--under Reagan, Clinton, and Bush II--and one national delusion-The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal.

Applying the Leeches.
Then along came the Bush tax cuts, enacted first on June 7, 2001, with a follow-on installment two years later. The president and his advisers seemed to believe that tax cuts, especially for upper-income Americans and corporations, were a cure-all for any economic disease--the modern-day equivalent of leeches. The tax cuts played a pivotal role in shaping the background conditions of the current crisis. Because they did very little to stimulate the economy, real stimulation was left to the Fed, which took up the task with unprecedented low-interest rates and liquidity.

America's household saving rate plummeted to zero. But it should have been clear that we were living on borrowed money and borrowed time.

The cut in the tax rate on capital gains contributed to the crisis in another way. It was a decision that turned on values: those who speculated (read: gambled) and won were taxed more lightly than wage earners who simply worked hard.

The Bush administration was providing an open invitation to excessive borrowing and lending.

In the face of the worst recession in seventy years you can only think of depening the Bush tax cuts for the rich as the one out of this crisis..Surely you must be kidding!

Cut taxes and spending.

Steve,

A) I don't believe you.

B) I'll choose my own Nobel Laureates (all of which are loosing intellectual goodwill at a geometric rate because they are voted on by socialists)

C) Supply side tax policy has been a veritable lottery prize for big spending Democrats because of the money overflowing federal coffers. Look it up. It's true. Lowering the highest marginal tax rates increases federal tax collections. Unfortunately a lot of Republicans got drunk at that same spending party also, but they are out of office now.

Yeah, the Nobel committee, an institution of socialism if ever there were one.

Read Nobel winner Amartya Sen's Development as Freedom. Should take about an hour or two, and if you like it, you can get into his meatier texts like Rationality and Freedom. He uses lots of empirical examples to prove--prove--that Milton Friedman's theories work only in certain circumstances, and that for the most part developing countries have had great success with Keynesian economics, so long as they have a stable government. He proves that ideology has no place in good economics, which is to say that always raising taxes or always slashing taxes in such-and-such a scenario is stupid.

There are too many variables to make categorical statements when it comes to macroeconomic policy. If it were as simple as you suggest it is, Hugh, then morons like bill-tb could reasonably call themselves "economists".