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| Chart 1 below shows the differences between demand-side and supply-side perspectives with respect to the key variables in the analysis.
Chart 1
Growth in GDP, Business Investment, and Employment
Related to Low Marginal Tax Rates
and High Personal Consumption Expenditures
Supply-Side Vs Demand-Side Tax Cuts and U.S. Economic Growth 1951-2004
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| Year | GDP $Billions | % Real GDP Growth | Ranking of % Real GDP Growth | Personal Consumption Expenditures
$Billions | % Real PCE Growth | Ranking of % Real PCE Growth | Gross Non-residential Fixed Investment
$Billions | % Real GNRFI Growth | Ranking of % Real GNRFI Growth | Total Nonfarm Employment
(000) | % Employment Growth | Ranking of % Employment Growth | Un-employment Rate | Ranking of Un-employment Rate | Marginal Tax Rate | Ranking of Marginal Tax Rate | | 1951 | 339.3 | 7.7 | BEST | 208.5 | 1.6 | WORST | 31.8 | 4.6 | MIDDLE | 47,930 | 5.84 | BEST | 3.3 | BEST | 87.2% | HIGHEST | | 1952 | 358.3 | 3.8 | MIDDLE | 219.5 | 3.2 | MIDDLE | 31.9 | -1.9 | WORST | 48,909 | 2.04 | MIDDLE | 3.0 | BEST | 88.0% | HIGHEST | | 1953 | 379.4 | 4.6 | BEST | 233.1 | 4.8 | BEST | 35.1 | 9.0 | BEST | 50,310 | 2.86 | MIDDLE | 2.9 | BEST | 88.0% | HIGHEST | | 1954 | 380.4 | -0.7 | WORST | 240.0 | 2.0 | WORST | 34.7 | -2.1 | WORST | 49,093 | -2.42 | WORST | 5.5 | MIDDLE | 87.0% | HIGHEST | | 1955 | 414.8 | 7.1 | BEST | 258.8 | 7.3 | BEST | 39.0 | 11.1 | BEST | 50,744 | 3.36 | BEST | 4.4 | BEST | 87.0% | HIGHEST | | 1956 | 437.5 | 1.9 | WORST | 271.7 | 2.9 | MIDDLE | 44.5 | 5.7 | MIDDLE | 52473 | 3.41 | BEST | 4.1 | BEST | 87.0% | HIGHEST | | 1957 | 461.1 | 2.0 | WORST | 286.9 | 2.5 | WORST | 47.5 | 1.5 | MIDDLE | 52,959 | 0.93 | WORST | 4.3 | BEST | 87.0% | HIGHEST | | 1958 | 467.2 | -1.0 | WORST | 296.2 | 0.8 | WORST | 42.5 | -11.0 | WORST | 51,426 | -2.89 | WORST | 6.8 | WORST | 87.0% | HIGHEST | | 1959 | 506.6 | 7.1 | BEST | 317.6 | 5.6 | BEST | 46.5 | 8.0 | MIDDLE | 53374 | 3.79 | BEST | 5.5 | MIDDLE | 87.0% | HIGHEST | | 1960 | 526.4 | 2.5 | WORST | 331.7 | 2.8 | WORST | 49.4 | 5.7 | MIDDLE | 54,296 | 1.73 | MIDDLE | 5.5 | MIDDLE | 87.0% | HIGHEST | | 1961 | 544.7 | 2.3 | WORST | 342.1 | 2.1 | WORST | 48.8 | -0.6 | WORST | 54,105 | -0.35 | WORST | 6.7 | WORST | 87.0% | HIGHEST | | 1962 | 585.6 | 6.1 | BEST | 363.3 | 5.0 | BEST | 53.1 | 8.7 | MIDDLE | 55,659 | 2.87 | MIDDLE | 5.5 | MIDDLE | 87.0% | HIGHEST | | 1963 | 617.7 | 4.4 | MIDDLE | 382.7 | 4.1 | MIDDLE | 56.0 | 5.6 | MIDDLE | 56,764 | 1.99 | MIDDLE | 5.7 | MIDDLE | 87.0% | HIGHEST | | 1964 | 663.6 | 5.8 | BEST | 411.4 | 6.0 | BEST | 63.0 | 11.9 | BEST | 58,391 | 2.87 | MIDDLE | 5.2 | MIDDLE | 77.0% | HIGHEST | | 1965 | 719.1 | 6.4 | BEST | 443.8 | 6.3 | BEST | 74.8 | 17.4 | BEST | 60,874 | 4.25 | BEST | 4.5 | BEST | 70.0% | HIGHEST | | 1966 | 787.8 | 6.5 | BEST | 480.9 | 5.7 | BEST | 85.4 | 12.5 | BEST | 64,020 | 5.17 | BEST | 3.8 | BEST | 70.0% | MIDDLE | 1967 | 832.6 | 2.5 | WORST | 507.8 | 3.0 | MIDDLE | 86.4 | -1.4 | WORST | 65,931 | 2.99 | MIDDLE | 3.8 | BEST | 70.0% | MIDDLE | | 1968 | 910.0 | 4.8 | BEST | 558.0 | 5.7 | BEST | 93.4 | 4.5 | MIDDLE | 68,023 | 3.17 | BEST | 3.6 | BEST | 75.3% | HIGHEST | | 1969 | 984.6 | 3.1 | MIDDLE | 605.2 | 3.7 | MIDDLE | 104.7 | 7.6 | MIDDLE | 70,512 | 3.66 | BEST | 3.5 | BEST | 77.0% | HIGHEST | | 1970 | 1,038.5 | 0.2 | WORST | 648.5 | 2.3 | WORST | 109.0 | -0.5 | WORST | 71,006 | 0.70 | WORST | 4.9 | BEST | 71.8% | HIGHEST | | 1971 | 1,127.1 | 3.4 | MIDDLE | 701.9 | 3.8 | MIDDLE | 114.1 | 0.0 | WORST | 71,335 | 0.46 | WORST | 5.9 | MIDDLE | 70.0% | MIDDLE | | 1972 | 1,238.3 | 5.3 | BEST | 770.6 | 6.1 | BEST | 128.8 | 9.2 | BEST | 73,798 | 3.45 | BEST | 5.6 | MIDDLE | 70.0% | MIDDLE | | 1973 | 1,382.7 | 5.8 | BEST | 852.4 | 4.9 | BEST | 153.3 | 14.6 | BEST | 76,912 | 4.22 | BEST | 4.9 | BEST | 70.0% | MIDDLE | | 1974 | 1,500 | -0.5 | WORST | 933.4 | -0.8 | WORST | 169.5 | 0.8 | WORST | 78,389 | 1.92 | MIDDLE | 5.6 | MIDDLE | 70.0% | MIDDLE | | 1975 | 1,638.3 | -0.2 | WORST | 1,034.4 | 2.3 | WORST | 173.7 | -9.9 | WORST | 77,069 | -1.68 | WORST | 8.5 | WORST | 70.0% | MIDDLE | | 1976 | 1,825.3 | 5.3 | BEST | 1,151.9 | 5.5 | BEST | 192.4 | 4.9 | MIDDLE | 79,502 | 3.16 | BEST | 7.7 | WORST | 70.0% | MIDDLE | | 1977 | 2,030.9 | 4.6 | BEST | 1,278.6 | 4.2 | MIDDLE | 228.7 | 11.3 | BEST | 82,593 | 3.89 | BEST | 7.1 | WORST | 70.0% | MIDDLE | | 1978 | 2,294.7 | 5.6 | BEST | 1,428.5 | 4.4 | BEST | 280.6 | 15.0 | BEST | 86,826 | 5.13 | BEST | 6.1 | WORST | 70.0% | MIDDLE | | 1979 | 2,563.3 | 3.2 | MIDDLE | 1,592.2 | 2.4 | WORST | 333.9 | 10.1 | BEST | 89,932 | 3.58 | BEST | 5.8 | MIDDLE | 70.0% | MIDDLE | | 1980 | 2,789.5 | -0.2 | WORST | 1,757.1 | -0.3 | WORST | 362.4 | -0.3 | WORST | 90,528 | 0.66 | WORST | 7.1 | WORST | 70.0% | MIDDLE | | 1981 | 3,128.4 | 2.5 | WORST | 1941.1 | 1.4 | WORST | 420.0 | 5.7 | MIDDLE | 91,289 | 0.84 | WORST | 7.6 | WORST | 70.0% | MIDDLE | | 1982 | 3,255 | -1.9 | WORST | 2,077.3 | 1.4 | WORST | 426.5 | -3.8 | WORST | 89,677 | -1.77 | WORST | 9.7 | WORST | 50.0% | MIDDLE | | 1983 | 3,536.7 | 4.5 | BEST | 2,290.6 | 5.7 | BEST | 417.2 | -1.3 | WORST | 90,280 | 0.67 | WORST | 9.6 | WORST | 50.0% | MIDDLE | | 1984 | 3,933.2 | 7.2 | BEST | 2,503.3 | 5.3 | BEST | 489.6 | 17.7 | BEST | 94,530 | 4.71 | BEST | 7.5 | WORST | 50.0% | MIDDLE | | 1985 | 4,220.3 | 4.1 | MIDDLE | 2720.3 | 5.2 | BEST | 526.2 | 6.6 | MIDDLE | 97,511 | 3.15 | BEST | 7.2 | WORST | 50.0% | MIDDLE | | 1986 | 4,462.8 | 3.5 | MIDDLE | 2,899.7 | 4.1 | MIDDLE | 519.8 | -2.9 | WORST | 99,474 | 2.01 | MIDDLE | 7.0 | WORST | 50.0% | MIDDLE | | 1987 | 4,739.5 | 3.4 | MIDDLE | 3,100.2 | 3.3 | MIDDLE | 524.1 | -0.1 | WORST | 102,088 | 2.63 | MIDDLE | 6.2 | WORST | 38.5% | LOWEST | | 1988 | 5,103.8 | 4.1 | MIDDLE | 3,353.6 | 4.1 | MIDDLE | 563.8 | 5.2 | MIDDLE | 105,345 | 3.19 | BEST | 5.5 | MIDDLE | 28.0% | LOWEST | | 1989 | 5,484.4 | 3.5 | MIDDLE | 3,598.5 | 2.8 | WORST | 607.7 | 5.6 | MIDDLE | 108,014 | 2.53 | MIDDLE | 5.3 | MIDDLE | 28.0% | LOWEST | | 1990 | 5,803.1 | 1.9 | WORST | 3,839.9 | 2.0 | WORST | 622.4 | 0.5 | WORST | 10,9487 | 1.36 | WORST | 5.6 | MIDDLE | 31.0% | LOWEST | | 1991 | 5,995.9 | -0.2 | WORST | 3,986.1 | 0.2 | WORST | 598.2 | -5.4 | WORST | 108,374 | -1.02 | WORST | 6.8 | WORST | 31.0% | LOWEST | | 1992 | 6,337.7 | 3.3 | MIDDLE | 4,235.3 | 3.3 | MIDDLE | 612.1 | 3.2 | MIDDLE | 108,726 | 0.32 | WORST | 7.5 | WORST | 31.0% | LOWEST | | 1993 | 6,657.4 | 2.7 | MIDDLE | 4,477.9 | 3.3 | MIDDLE | 666.6 | 8.7 | MIDDLE | 110,844 | 1.95 | MIDDLE | 6.9 | WORST | 40.8% | LOWEST | | 1994 | 7,072.2 | 4.0 | MIDDLE | 4,743.3 | 3.7 | MIDDLE | 731.4 | 9.2 | BEST | 114,291 | 3.11 | BEST | 6.1 | WORST | 40.8% | LOWEST | | 1995 | 7,397.7 | 2.5 | WORST | 4,975.8 | 2.7 | WORST | 810.0 | 10.5 | BEST | 117,298 | 2.63 | MIDDLE | 5.6 | MIDDLE | 40.8% | LOWEST | | 1996 | 7,816.9 | 3.7 | MIDDLE | 5,256.8 | 3.4 | MIDDLE | 875.4 | 9.3 | BEST | 119,708 | 2.05 | MIDDLE | 5.4 | MIDDLE | 40.8% | LOWEST | | 1997 | 8,304.3 | 4.5 | BEST | 5,547.4 | 3.8 | MIDDLE | 968.7 | 12.1 | BEST | 122,776 | 2.56 | MIDDLE | 4.9 | BEST | 40.8% | LOWEST | | 1998 | 8,747 | 4.2 | MIDDLE | 5,879.5 | 5.0 | BEST | 1,052.6 | 11.1 | BEST | 125,930 | 2.57 | MIDDLE | 4.5 | BEST | 40.8% | LOWEST | | 1999 | 9,268.4 | 4.5 | BEST | 6,282.5 | 5.1 | BEST | 1,133.9 | 9.2 | BEST | 128,993 | 2.43 | MIDDLE | 4.2 | BEST | 40.8% | LOWEST | | 2000 | 9,817 | 3.7 | MIDDLE | 6,739.4 | 4.7 | BEST | 1,232.1 | 8.7 | MIDDLE | 131,785 | 2.16 | MIDDLE | 4.0 | BEST | 40.8% | LOWEST | | 2001 | 10,128 | 0.8 | WORST | 7,055 | 2.5 | WORST | 1,176.8 | -4.2 | WORST | 131,826 | 0.03 | WORST | 4.7 | BEST | 40.3% | LOWEST | | 2002 | 10,487 | 1.9 | WORST | 7,376.1 | 3.1 | MIDDLE | 1,063.9 | -8.9 | WORST | 130,341 | -1.13 | WORST | 5.8 | MIDDLE | 39.8% | LOWEST | | 2003 | 11,004 | 3.0 | MIDDLE | 7,760.9 | 3.3 | MIDDLE | 1,094.7 | 3.3 | MIDDLE | 129,931 | -0.31 | WORST | 6.0 | MIDDLE | 36.1% | LOWEST | | 2004 | 11,733.5 | 4.2 | MIDDLE | 8,229.1 | 3.8 | MIDDLE | 1,220.2 | 10.5 | BEST | 131,481 | 1.19 | WORST | 5.5 | MIDDLE | 36.1% | LOWEST |
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| *For each variable, years have been divided into three 18-year groups, ranked BEST, MIDDLE, and WORST.
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| SOURCES: Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts; Bureau of Labor Statistics; Tax Policy Center.
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Appendix Table 2
U.S. Economic Growth 2001-2005
Revised Government Data Published July 28, 2006
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| Year |
GDP $Billions |
% Real GDP Growth |
Personal Consumption Expenditures $Billions |
% Real PCE Growth |
Gross Non-residential Fixed Investment $Billions |
% Real GNRFI Growth |
Total Nonfarm Employment (000) |
% Employment Growth |
Un-employment Rate |
Marginal Tax Rate |
| 2001 |
10,128.0 |
0.8 |
7,055.0 |
2.5 |
1,176.8 |
-4.2 |
131,826 |
0.03 |
4.7 |
38.6% |
| 2002 |
10,469.6 |
1.6 |
7,350.7 |
2.7 |
1,066.3 |
-9.2 |
130,341 |
-1.13 |
5.8 |
38.6% |
| 2003 |
10,960.8 |
2.5 |
7,703.6 |
2.8 |
1,077.4 |
1.0 |
129,999 |
-0.26 |
6.0 |
35.0% |
| 2004 |
11,712.5 |
3.9 |
8,211.5 |
3.9 |
1,155.3 |
5.9 |
131,435 |
1.10 |
5.5 |
35.0% |
| 2005 |
12,455.8 |
3.2 |
8,742.4 |
3.5 |
1,265.7 |
6.8 |
133,463 |
1.54 |
5.1 |
35.0% |
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| Note: These data were released after the article "Supply-Side vs. Demand-Side tax Cuts and U.S. Economic Growth 1951-2004", Critical Review (17) and after the related book The American Dream vs. the Gospel of Wealth: The Fight for a Productive Middle-Class Economy.
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This page © Copyright 2006 The Future of American Democracy Foundation.
Design, illustration, and coding by Alessandra Kelley.
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