I am sick and tired of propagandist Rush Limbaugh claim, almost on a daily basis, that lower taxes, and he means the rate on the top individual income tax bracket, or marginal tax rate, leads to higher growth. Most right-wing Republicans believe in his lies and never bother to check the facts with the benefit of the hindsight. There is no subject related to the economy in America that has more propaganda than taxes because over time trillions are at stake.

I have known that Limbaugh and other Right-wingers have been lying and finally decided to present the facts in graphical form, as shown in Fig. 1. As you can see, as the top rate has fallen from 90% to 35%, the annual GDP growth rate for the following 8 years has fallen from 5% to 1.5%.

Since the GW Bush tax cuts, all the GDP growth, and lot more, has been bought by $12.5Tr in additional federal govt and household debt. But for the growth due to borrow-and-spend the annual GDP growth in the US since 2001 would have been close to -4% (minus four percent). Can you spell g-r-e-a-t-e-r d-e-p-r-e-s-s-i-o-n? The cost of postponing the greater depression is simply a much worse and longer lasting depression in the future. The time bomb is ticking.

By Jas Jain , Ph.D.

the Prophet of Doom and Gloom

Copyright © 2011 Jas Jain - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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