According to the US Commerce Department, our economy grew at its fastest pace in two years during the spring of 2008. In fact, in the middle of what we now know was the start of our current recession, real Gross Domestic Product grew at a rate 50% faster than the government predicted.
GDP increased at a 3.3% annual rate during the second quarter (April-June) 2008. The government had predicted a growth rate of 1.9%. The rosiest outlook from economists was a hopeful 2.7%.
So why the boost? Commerce says President Bush’s tax rebate checks were a major player. This tells me something significant: that lowering taxes spurs economic growth.
Make no mistake, those “rebate” checks were not a government gift. A tax rebate is just a fancy way for Congress to cut taxes temporarily. Put another way, this was the government’s way of loaning us our own money.
But here’s the important part. If a one-time $600 tax break per person boosted economic growth over 3% – during a recession! — just imagine what our economy would do if Washington enacted significant, permanent tax reductions!
