Bruce Bartlett posts a note that could have come from me (but, for reasons that will become obvious, did not:
During the 8 Reagan years, when marginal [tax] rates were sharply cut (but deficits were substantial), equities on the NYSE and the S & P 500 about doubled.
During the 4 Bush 41 years, when the top MTR was increased (only slightly), equities rose about 50%.
During the 8 Clinton Years, when MTRs were substantially increased, equities tripled, deficits turned into large surpluses (as far as the eye could see, leading some to fear that the Fed would be unable to conduct monetary policy if the public debt was redeemed).
The market today is roughly where it was (a bit higher) when Bush 43 took over, who cut MTRs, but ballooned the deficit.
So, Bush 41 and Clinton raised MTRs without tanking the economy, and Clinton left Bush 43 with a fabulous fiscal situation.
So much for the Republican argument that reducing MTRs is the nirvana of tax/economic policy and raising MTRs its death knell.
The e-mail was from “a person well known in conservative economic circles” who “asked that [Mr. Bartlett] not use his or her name if I used this information.”
We’re not talking about proprietary information here. And it is saddening that a prominent economist would not be able to discuss such elementary data in public without the promise of anonymity.