Fundamentals of Economics

The nation's economy is driven by money in the hands of the many people. Money in the hands of the rich does not affect the economy. If the people have money, businesses have a market for goods and services and they expand.  If the people have no money, there is no market and businesses contract. It is that simple.

In 1929, many people were trading stocks on 10% margins and banks were risking deposits in the market.  When the overpriced market crashed, billions were pulled from the economy and the depression was immediate.  Hoover foolishly gave more money to the rich (originating the term "trickle down") and there was no effect. Entering office in 1933, Franklin Roosevelt taxed the rich and started the Works Progress Administration (WPA),  Civilian Conservation Corps (CCC), etc.  This put pay checks in the hands of people and the depression slowly lifted.

Reagan's voodoo (George G. Bush's term for it) economics of the 1980s repeated Hoover's folly.  Reagan proposed tax cuts for the rich, lowering the top personal income tax rate from 70%  (starting at $215,000) to 28%.  (The term "supply side" was invented to replace the discredited "trickle down".)  The resulting deficit was estimated at $200 billion.   He said that the economy would be spurred and there would be no deficit.   The resulting deficit was $200 billion as predicted.  David Stockman, the architect of Reagonomics, freely admitted in a 1981 interview and in his 1986 book that "supply side" was "trickle down" and that the idea that such cuts would spur the economy and pay for themselves was a myth. See the complete quote>    See my more detailed discussion of Reagonomics>

The Republicans argue that we must divert money to the rich so that they will invest in business expansion - chase a market which doesn't exist unless the people have money.  This is a repeat of Hoover's folly.  We do need capital for investment but we have plenty of that.   As the government stops borrowing and repays the debt, those hundreds of billions will be available for investment in business.  But, if there is no market here those investments will go abroad.

 G.W.Bush tax breaks for the rich have produced up to $596 Billion deficits (increased debt in a year) and driven the debt from $ 5.7 to 8.4   8.8 Trillion.

See a recent article from the Center on Budget and Policy Priorities describing the effects of the Bush tax cuts on the economy.

Congressman Hobson has supported every Bush tax cut for the rich and has attempted to offset the resulting deficit by voting to cut health, education, and welfare programs for the people.

Bottom line:
Tax Cuts for the Rich do not help the economy!
They only help the Republican campaign funds.