Assignment Tasks

The tax cuts were paid for with borrowed money. Borrowing added to the national debt. The 2% growth in GDP between 2001-2003 and 2008 did not include the interest rates associated with the borrowed debt. Furthermore, the economic increase from 2001 to 2007 was smaller than the overall US economic growth in the preceding and subsequent decades. Based on these detrimental effects, the Bush Tax Cuts of 2001-2003 and 2008 were a bad decision (Weinzierl and Werker 2). After the 2008 tax cut, households in the US appeared to have spent relatively smaller percentage of their tax rebates, approximately 25 and 67 cents more for each dollar of tax cut. The tax cuts had a negative effect on low income earners as they spent much of their tax rebates as compared to high income earners in the U.S (Weinzierl and Kuipers, 2011). Therefore, the Bush Tax Cut of 2008 generally benefited high-income households that is it favored wealthy people and hence was a poor way of stimulating the economy.

Question Three

The tax cuts of 2008 were designed to reduce the production cost for businesses in US and thus meant good fortune for businesspersons. As a businessperson, I would have wanted my senator to vote for the tax cut. The table 1 and 2 represents voting patterns for congress representatives and senators respectively

Congress Representatives

Democrats

Republicans

Independents

Yea

218

169

0

Nay

10

25

0

Present

1

0

0

Not Voting

5

5

0

Table 1. Congress Representatives votes for Tax cuts of 2008

From table 1. It is clear that most democrat congress representatives supported the Tax cuts of 2008. However, the republicans also supported the tax cut by 169 congress representatives out of the total of 194 representatives present. These means that majority of the congress representatives supported the tax cuts.

Senators

Democrats

Republicans

Independents

Yea

46

33

2

Nay

0

16

0

Not Voting

3

0

0

Table 2: Senators votes for Tax cuts of 2008 (Weinzierl and Kuipers 18)

From table 2, it is clear that most democrat senators supported the Tax cuts of 2008. On the other hand, the republicans also supported the tax cut by 33 senators out of the total of 49 representatives present. This implies that the tax cut received a massive support from both the democrats and republicans.

Question Four

The American Recovery and Reinvestment Act (ARRA) failed to since the dollar the government poured into the economy through government expenditure ultimately poured back to the government through duties and taxes. This eventually denied the production economy of the capital as opposed to what the president hoped it would. The president based the stimulus on neo-Keynesian assurance that economies can be jolted into operation by a wave of government expenditures (Weinzierl and Werker 7). The households do not differ with the discussion that, without authority interventions, the economic recession of 2009 would have been greatly worse. However, there is also no real proof that the economy is gaining any organic traction either. This is due to the continued misallocation of funds, combined with ever growing(prenominal) levels of state liability, which persist to deprive future economic growth for short term stability. Therefore, we cannot be certain as to which level did the ARRA programs achieved as was hoped by president Obama (Weinzierl and Werker 6).

Works Cited

Weinzierl, M. and Kuipers, J. “Barack Obama and The Bush Tax Cuts (B).” Havard Business School 712.012 (2011): 2-20. (Weinzierl and Kuipers, 2011)

Weinzierl, M. and Werker, E. “Barack Obama and Bush Tax Cut (A).” Havard Business School 709.039 (2011): 2-7.