The chapter that I found most helpful was entitled "How Obama has screwed up our economy" in which the authors discuss why tax hikes won't cut the deficit, and how tax cuts stimulate the economy. They give examples such as when Reagan agreed with a Democratic Congress to raise taxes in 1982. "The deal was that for each dollar in tax hikes, they would cut $3.00 in government spending. ...But although the taxes went up, the spending never came down. In fact it rose. From 1983 to 1988 federal outlays increased 808 billion to $1.1 trillion." The authors also point out that when Clinton cut the capital gains rate from 28% to 20%..."growth averaged 4.6% over the next three years--1.6% higher." Morris points out that part of the growth during the Clinton administration was due to this capital gains cut (along with a booming tech bubble and economy). Interesting stuff.
Labels: interesting books