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Tax cuts

The tax cut passed in 2001 by Congress and signed into law by the Resident is credited with wiping away the budget surplus and returning the U.S. to a budget deficit, all in a time of an economic recession. This latter fact is important, because the government has played and can continue to play an important role in stimulating the economy -- however the form of stimulus is a contentious issue.

This points to a fundamental difference in views of economic policy. Supporters of a tax cut argue that by ensuring the people have more money in their pockets, chances are higher that they will spend the money and increase demand -- thus stimulating production. Opponents of the recent tax cut argued that it was skewed in favor of the already wealthy, and that the amount passed on to middle class and lower class citizens was negligible.