You are certainly correct that not very many people paid at the maximum tax rate of 91% in the 1950s. One exception was the great comedian, Ernie Kovacs. High flyers in the movie and entertainment industry were one of the groups that earned enough income to qualify for the highest tax rate on earned income. Kovacs objected to paying so much in taxes and didn’t remit very much to the IRS. As a result, the IRS dunned him for 90% of his earnings. After his untimely death, his wife, Eddie Adams, was stuck with hundreds of thousands of dollars of IRS tax liens.

The trust fund types, the corporate titans, the oil well millionaires and the Wall Street financiers invested in tax shelters and/or tax-free minicipal bonds. It was from middle America that the bulk of the taxes were collected.

Government spending was considerably lower in the 1950s. And government spending SLOWS GROWTH. You can read that in this landmark paper The Impact of Government Spending on Economic Growth http://www.heritage.org/research/reports/2005/03/the-impact-of-government-spending-on-economic-growth by Mr. Dan Mitchell. There Mr. Mitchell shows MASSIVE multi country empirical evidence about INCREASING government spending SLOWING growth.

Or you can read this other landmark paper The Size and Functions of Government And Economic Growth http://www.house.gov/jec/growth/function/function.htm where you can see INCREASING GOVERNMENT spending SLOWING growth and DECREASING government spending ACCELERATING growth. That paper shows how in the USA in 1960-1996 INCREASED government spending was accompanied by SLOWER growth. You can see there how TOTAL (federal plus others) government spending in the USA was 28.4% of GDP in 1960 while now it is about 40%. You can go to the St Louis Federal Reserve FRED Website and you can compute Federal Spending as a percentage of GDP and you will see that THE GREAT DEPRESSION was a period of HUGE increase in federal government spending.

If you look at recessions it becomes obvious that ” tight money” triggers them, tight money preceded every one of the recessions that follow. But after the early 1920s recession there were the Harding Tax Cuts, after the late 1950s recession there were the Kennedy Tax Cuts, after the early 1980s recession there were the Reagan Tax Cuts and after the 2000 Recession there were the Bush Tax Cuts. Periods of prosperity. But after the 1929 very tight money (see the 1928 exorbitant short term interest rates and Robert Mundell’s work) there were no tax cuts. Just the opposite went on: MORE government spending, MORE taxes and MORE regulations. They gave the economy the socialist “more oppressive government” medicine. But USA got THE GREAT DEPRESSION, a terrible crisis period where, moreover, unemployment was very high for more than 10 years while Keynes “medicine” for unemployment -higher government spending- was massively applied.

These very important facts agree with tax cuts offsetting the damage done by higher government spending. If government spending was higher during the 1950s then growth would have been slower then. And the low government spending 1800s had spectacular USA growth, the USA became the world superpower in record time during that high growth low government spending period (probably less than 10% of GDP TOTAL govt spending in the 1800s!)

Your are posting tax cut demonizing arguments espoused by Mr. Paul Krugman. But Mr. Krugman ultimate defeat in demonizing tax cuts came when Mr. Obama, one of the most socialist presidents ever, extended the Bush tax cuts. It is your arguments that are fundamentally amiss, Mr. Art R.

The rich paid about the same in real tax rates as they are now after all the allowances and gimmicks were applied. When a congressperson sneaks a million dollar deduction for a constituent, it is exactly the same as handing them a million dollars in cash except it comes out of our pockets.

Debt is acceptable when it is used to finance production or lasting infrastructure improvements. Debt used to finance idiotic wars (strangely, you didn’t list the Bush wars in the above video) and to support consumption and a lifestyle we haven’t earned is bad. We’ve been living way beyond our means for a long time.

Hasn’t it occurred to you that there is something fundamentally amiss with our current economic model and that the massive deficits of late are a manifestation of same? Some day, and I hope it is soon, you will come to understand that when you destroy your industrial base, you destroy your wealth.