[AskUncleBill] Getting A Bit Worried
October 7, 2007 by Uncle Bill
Filed under Finance
divpThe stock market is doing great and I’m a big bull but I’m getting a bit concerned.nbsp; As we enter another silly season of presidential politics the Dems are making noises about taxes.nbsp; Bush’s tax cuts disappear in 2010 if nothing is done to make them permanent and the Dems, sorry to say this, rarely show much sense when it comes to taxes and the economy.nbsp; /p pIf the tax cuts disappear, you can probably bet on a recession.nbsp; The stock market will smell this out before the fact and the market could tank, big time, in 2008 or 2009.nbsp; /p pNever happen?nbsp; Maybe but let’s look at some tax facts courtesy of Investors Business Daily.nbsp; Tax cuts are fairly far and few between–Coolidge in the 1920s, Kennedy in the 1960s, Reagan in the 1980s and Bush in 2003./p pHere are the facts–since the Bush tax cut in May, 2003, real GDP has grown 13%, about 3.2% a year.nbsp; Pretty good.nbsp; Compare that to Clinton’s last year in office-1.5%.nbsp; /p pBut not just Bushie.nbsp; After Coolidge cut taxes, real GDP rose 59% from 1920 to 1929.nbsp; After the Kennedy tax cut, real GDP rose 42% from 1961 to 1968.nbsp; Real GDP rose 31% during the Reagan boom./p pOther factors?nbsp; Of course.nbsp; But tax cuts work and tax increases don’t.nbsp; So all the rumblings on the campaign trail are starting to make me a bit nervous. /p /div
