There’s no way of knowing what federal revenues would be doing right now if the Bush tax cuts had never passed. But it is possible to compare this recovery to past recoveries, and the current one pales in comparison.
A study by the liberal Economic Policy Institute compared several measures of recovery since the peak of the last business cycle to the previous four recoveries. In every measure, the current recovery is falling short.
Gross domestic product and gross domestic income are rebounding more slowly than average. Job creation and the employment rates are far below average for a typical recovery.
All those measures increased faster after the 1991 recession, even as President Clinton raised taxes.
As the EPI study concluded, “Although the tax cuts have failed to boost economic performance, they have not failed to reduce revenues substantially. In the recently completed fiscal year 2005, the combined effect of the tax cuts passed since 2001 was $225 billion without interest.”
With interest costs included, the tax cuts reduced federal revenue by $260 billion. Thus four-fifths of the $317 billion deficit in 2005 can be attributed to tax cuts Republicans insist pay for themselves.