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February 10, 2012
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The Kosher Gourmet byDana Velden: Going to the bother of making soup? You know it better be good. This CREAM OF TOMATO SOUP certainly is! And it's a cinch to make, too (Includes techinques and serving secrets)
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Mark Clayton: How did Anonymous hackers eavesdrop on FBI and Scotland Yard?
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Victoria Kim: Immigrant-smuggling ring used black drivers to avoid racial profiling
February 2, 2012
Jim Carney: Wrong number call may have saved her life
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Tina Susman: For woodchuck rescuer, every day is Groundhog Day
February 1, 2012
Brian Bennett: US officials see increasing threat of domestic attack from Iran
Emily Brandon: How to Take Advantage of New 401(k) Fee Disclosures
January 31, 2012
January 30, 2012
Paul Richter and Ramin Mostaghim: Misreading Teheran's limits -- deadly and economically devastating as they may be -- is a risk administration, Europe seem willing to take
Suzanne Bohan: Warning: Nap-deprived tots missing more than sleep, study finds
Meg Handley: Banks Revamping Rewards Programs to Woo Customers
January 27, 2012
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Yochonon Donn: In liberal New York City, fervently-Orthodox Jews may soon be getting a district to call their own
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Katy Hopkins: New budget rules may affect how much money you get for college
January 26, 2012
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Jeannine Stein: Mental illness struck one in five U.S. adults in 2010: Report
January 25, 2012
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Susan Johnston: 5 Sneaky Coupon Strategies Consumers Should Watch Out For
January 24, 2012
Carol Clark: The price of your soul: How your brain decides whether to 'sell out'
Caroline B. Glick: America lost most in 'Arab Spring'. Sadly, many voters still don't grasp the extent
Warren Richey: Drug criminal scores win in GPS ruling from conservative-leaning high court
Erika Bolstad: Black conservatives gather to talk about gaining strength
January 23, 2012
Melissa Dribben: Jewish voters to play a key role in Florida's Republican primary
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Ali Safi: U.S. envoy gives Taliban terms for peace talks
January 19, 2012
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January 17, 2012
Frank J. Gaffney Jr.: No-kidding red lines: U.S. response to an Iranian nuke may be bluster, but Israel's won't be
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January 13, 2012
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Alexia Elejalde-Ruiz: Thriving through touch: Gentle massage helps older people with low mobility improve in mind and body
January 12, 2012
Warren Richey: Landmark Supreme Court ruling a 'resounding win' for religious groups
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John Fauber : Statins found to raise diabetes risk in postmenopausal women
Katy Hopkins : Consider This Before You Pay for an Online Degree
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January 11, 2012
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Tom Hussain: Pakistan -- recipient of more than $21 billion in civilian and military aid -- speeds pursuit of Iranian pipeline, defying US
David G. Savage: High court signals it won't be loosening TV's 'indecency' rules
Stephen Ceasar: Oklahoma's Islamic law amendment can't go into effect, court rules
January 10, 2012
Reza Kahlili: From an ex-CIA spy: US must exploit new split in Iran's Revolutionary Guard
Karen Kaplan: Study: Nicotine replacement products ineffective when used in real-life situations
January 9, 2012
Michael Doyle: Put through legal hell over dream home, couple fought back hard --- all the way to Supreme Court
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Jewish World Review
May 12, 2006
/ 14 Iyar, 5766
How the boom began
By
Rich Lowry
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http://www.JewishWorldReview.com |
If you find a turtle on top of a fence post, Bill Clinton used to say, it means someone put it there. It was his folksy way to explain why anything good that happened was no accident, and he should get credit.
George Bush has a fat turtle on top of a fence post in the form of our extraordinarily robust investment-driven economic boom. Not only has he been unable to convince people he put it there, he hasn't even been able to convince them that the turtle is on the post at all. Attitudes about the economy remain downbeat, even as all the statistical indices point in the right direction.
Perhaps the biggest reason they started pointing that way so determinedly was Bush's tax cuts of 2003, which cut taxes on capital gains and dividends and expanded expensing for business investment. It is the most obviously effective economic initiative in years. That Bush hasn't managed to take credit for it is an extraordinary communications failing. It would be a little like FDR not selling the New Deal, or Bill Clinton not persuasively touting his (much overhyped) 1993 tax hike and deficit-reduction package.
The downturn Bush inherited early in his term was driven by an investment bust. Consumer spending wasn't the problem. Unlike in prior recessions, consumer spending didn't decline at all, according to a report of the Joint Economic Committee of Congress. In contrast, investment collapsed. The way to revive it was suggested by a simple principle the more you tax something, the less you get of it, and vice versa. Reducing taxes on capital and investment therefore should increase both, and so it has.
Consider the big picture: The tax cuts were passed in May 2003, and that's roughly when investment and everything else began to take off. According to the Joint Economic Committee, all inflation-adjusted fixed business investment dropped at a nearly 6 percent annual rate from the third quarter of 2000 to the first quarter of 2003, then jumped by 9.2 percent from the second quarter of 2003 to the first quarter of 2006. Investment in equipment and software followed the same trend during the same time period. Meanwhile, the stock market began growing at a faster pace, because taxes were less of a drag on its value.
Economics writer Donald Luskin notes that GDP growth, employment, corporate earnings, new manufacturers' orders and tax receipts all began booming after the spring of 2003. As he puts it, "Tell people they will get to keep more of the fruits of their labors and the fruits of their investments, and they will labor more and invest more."
Academic studies are adding specific evidence of the effectiveness of the 2003 tax changes. Part of what the 2003 cuts did was accelerate tax cuts that had been scheduled to phase in more slowly. University of Michigan Economists Christopher House and Matthew Shapiro conclude that "about half of the rebound in GDP in mid-2003 can be attributed to the elimination of the phase-in of the tax cuts."
In a study in the May issue of the American Economic Review, Alan Auerbach and Kevin Hassett find that the 2003 tax cuts increased particularly the market value of small and entrepreneurial firms.
There has been an increase in dividends again confirming that taxing something less creates more of it. Raj Chetty and Emmanuel Saez write in the Quarterly Journal of Economics: "An unusually large number of firms initiated or increased regular dividend payments in the year after the reform. As a result, the number of firms paying dividends began to increase in 2003 after a continuous decline for more than two decades."
One reason Bush hasn't been able to sell his 2003 tax cuts properly is that, until recently, the Republican Congress had failed to extend them. Now, the GOP is finally pushing their expiration date into the future, from 2008 to 2010. This is the occasion for celebration, and lots of explaining as to how the turtle got on that fence post.
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© 2006 King Features Syndicate
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