Reality Check: Did Ben get his numbers right on the Bush tax cut - Cincinnati News, FOX19-WXIX TV

Reality Check: Did Ben get his numbers right on the Bush tax cuts?

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Lisa emailed in response to my Reality Check on how our nation got into so much debt and she wasn't happy with what she heard.

Here is a portion of what she had to say.

"I would say that news organizations who dumb down (over simplify) the news in order to create an illusion of balance, or what I call faux balance, in the guise of complete fact checking, is a major reason the public is so misinformed."-Lisa, Alexandria, KY

So what did I mis-inform you about?  Lisa says when I say the revenues under President Bush rose even after the Bush tax cuts is "wholly inaccurate" because "the only honest and accurate measure of revenue is a percentage of G.D.P. Revenue has averaged 18% of  G.D.P. since 1970.  It was below 15% as Bush left office.  The bottom line is revenue as a share of G.D.P. was lower every single year of the bush presidency than it was in 2000."

So lets look at her statement.  First, that revenue has averaged 18% G.D.P. since 1970.  That is true.  And it is also true that "it was below 15% as President Bush left office."

But what Lisa doesn't take into account is that when President Bush left office, we were in the midst of a recession, which was caused by the housing crisis and Wall Street mess. 

So lets talk about the whole story of tax revenue percentage of G.D.P.

A graph from the Congressional Budget Office, shows the past 30 years, from 1981 to 2012. revenue percentage of G.D.P. the standard Lisa says I should have used.

Lisa says that the 40 year average for percentage of revenue to G.D.P. is 18 percent.

Well, in 2006, three years after the Bush tax cuts went into effect, revenue was 18.4% of G.D.P. under President Bush. That is in line with where we were a decade before under President Clinton in 1995 at 18.5%.  And a decade before that in 1987 under President Reagan at 18.4%. 

Lisa also states that  "revenue as a share of G.D.P. was lower every single year of the Bush presidency than it was in 2000."  Again that statement is true but not the whole story and to tie that to the Bush tax cuts is questionable, as 2000 was an anomaly.  Back to that graph from the CBO.  Revenue to G.D.P. was higher in 2000 than it was in any year in the past 30 years.

2005, 06 and 07, revenue percentage to G.D.P. is on the rise with three consecutive years.  The housing and Wall Street crisis of 2008 ends that streak.

Here's what you need to know..

There is one more thing on that graph that you need to see.

In the past 30 years we have had only 4 years when our tax revenue to G.D.P. percentage surpassed our expenses percentage to G.D.P.  Those years were 98, 99, 2000 and 2001. 

Lisa says I am over simplifying the issue.  But the bottom-line is that our problem is pretty simple.  As long as we as a nation are spending and borrowing more, or in this case vastly more,  than we take in, the country is in serious trouble.

And that is Reality Check.

http://upload.wikimedia.org/wikipedia/en/9/90/Revenue_and_Expense_to_GDP_Chart_1993_-_2008.png

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