Bush tax cuts did help the economy

President Obama and Congress are negotiating an extension to the Bush tax cuts, set to expire on Jan. 1. These cuts were enacted in 2001 by the Republican congress to revive the economy from the effects of the 2000 recession.

Today, Democrats tell us the tax cuts had little effect on the economy, and that raising taxes on the top 2 percent will reverse the inefficient tax cuts for the rich. A quick look at economic statistics from 2002 to 2007 proves that the Bush tax cuts had a significantly positive impact on the U.S. economy. In January 2002, the nominal gross domestic product (GDP) of the U.S. was $10.2 trillion dollars, and by December 2007, nominal GDP had increased to $14.2 trillion, an increase of $4 trillion.

What about job growth? In January 2002, nonfarm payroll (the number of people working in the U.S.) stood at 130.5 million people, and by December 2007, had grown to 137.9 million, an increase of 7.4 million jobs. The unemployment rate in January 2002 stood at 5.7 percent, peaked in June 2003 at 6.3 percent, and in both 2006 and 2007 fell to an average of 4.6 percent. Most economists agree that the U.S. had achieved full employment.

What about the federal deficit? In 2002, the federal budget deficit was 1.5 percent of GDP, peaked in 2004 at 3.4 percent of GDP, and fell in 2006 and 2007 to 1.1 percent of GDP. For the entire 6 year period, GDP grew faster than the budget deficit as a percent of GDP.

These numbers clearly show that the Bush tax cuts helped propel the U.S. economy forward. It stands to reason that removing any of the tax cuts (that were so beneficial to the economy from 2002 to 2007) will have a negative impact on the economy.

Charles Phillips

Glen Ellyn