“Why can’t we go back to the tax levels of 90’s, you know, when America was experiencing a lot of growth and people had jobs”
This classic cum hoc argument ignores the fact the growth of the 90’s led to the dotcom bubble and a recession. There were plenty of accounting scandals (Enron anyone?) to go around. The growth, at least some of it, was not real. The same way increasing housing prices didn’t reflect a true, underlying value (what used to be called a “natural” value).
And there’s still the problem of the mechanism, how will increasing taxes now give us back 3%+ GDP growth? How does it work? The fact of the matter, and I’ve published this graph and other iterations of the idea correlating government spending to GDP growth, the bigger chunk of the pie eaten by government in the form of spending, the slower an economy grows (on average):
- Will Social Media be our Dotcom Bubble 2.0? (umpf.co.uk)
- Debt cuts, job acts, and so forth (daveloveless.wordpress.com)
- AIG vs. Enron (mg312.wordpress.com)