I mean, supply-side economics should have been killed by the Clinton years: he raised taxes on the rich, everyone on the right predicted catastrophe, and what followed was 8 years of rapid growth and surging revenues, with the budget actually moving into surplus for the first time in three decades. But no: the right interpreted all the good stuff as a lagged effect of the 1981 tax cut (which meant that LBJ deserved credit for Morning in America, but who’s counting? Paul Krugman
Back in high school, a long time ago, I was a Republican and I remember arguing in support of this meme for the Bush tax cuts when he initially proposed them, citing the 90s as validation of Reagan’s early 80s tax cut package. What the hell was wrong with me?
To Republicans, tax cuts are everything. They can spur short-term growth, and sustain long-term growth. The Bush tax cuts were sold as just that – a panacea for all terms of future economic growth.
While the years following the Bush tax cuts were low GDP growth and increasing inequality, both the Obama administration and the Republican leadership are now touting them as stimulus measures. The White House considers them part of an all-in policy effort;throw some stimulus, some tax cuts, with unemployment benefits and some one-time-efforts like TARP, the auto bail out, etc, and you got yourself the defense “Well we’ve done everything, this is just how the economy is going to be.” Republicans consider it to be the only redeeming thing Obama has done to grow the economy.
Of course, the Bush tax cuts didn’t deliver in the medium- or long-term (or really do anything noticeable for the mild recession), and it’s very likely that the two year extension of tax cuts will do exactly what they did in the last period in the economic trouble.
While Obama’s tax cut is good politics, (maybe) good short-term stimulus and bad medium- and long-term growth policy, it’s also not good for the accuracy of American political perception. The ignorant (high school me) and Republicans can claim in two years when a moderate recovery seems likely, as they have with previous tax cuts, that it was the tax cuts that swung a moderate recovery by just validating their previous opinion. Sure there were tax cuts in the stimulus, but most Republican voters don’t even know that.
Why results-based political followers are frustrated with this deal is because it’s going to make it that much harder to combat the behavior of rabid tax cut supporters, who will jump decades forwards and backwards to pin economic successes on unrelated, mostly ineffectual tax cuts.