[Congressional Record (Bound Edition), Volume 148 (2002), Part 14]
[Senate]
[Pages 18824-18825]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              THE ECONOMY

  Mr. INHOFE. Mr. President, it is my intent today to make a few 
comments about someone I hold in such high esteem, perhaps in higher 
esteem than anyone else I can think of at this moment. Before doing 
that, I am compelled, however, to respond to some of the statements 
that have been made concerning the economy.
  I think we all recognize our economy started turning south about 3 
years ago. We did see this coming. I really do not like people saying--
because I am always afraid someone is going to believe it--that somehow 
when we reduce tax burdens on individuals that is going to 
automatically reduce the revenues that would have otherwise come from 
those taxes.
  History tells us just the opposite. In fact, yes, we are going to 
have a deficit. We understand that. We are currently in a war, and we 
understand even though the amount of additional money, some $48 
billion, that went into the war effort is totally inadequate, it is 
going to have to be more, and we are going to see deficits.
  The other factor causing deficits is a downturn in the economy. We 
all know for every 1 percent drop in economic activity, that translates 
into $24 billion of lost revenue. Turning that around, for every 1 
percent increase in economic activity, revenue will increase by $24 
billion. It has been proven over and over throughout the history of 
this country that every time we have had the opportunity and the 
courage to reduce taxes, not raise taxes, it has resulted in increased 
revenues.
  The best evidence of this is 1980. My colleague from Florida talked 
about the decade of the eighties, but let's look at what happened in 
the decade of the eighties.
  In the 1980s, the total amount of money that was raised from marginal 
rates was $244 billion. In 1990, that same figure was $406 billion. We 
can see in a 10-year period revenue almost doubled, and that was the 
10-year period when we had more reductions in marginal rates and in 
capital gains taxes and other taxes than any other 10-year period in 
this Nation's history.
  Is this a Republican idea? No, it is a conservative idea. Liberals do 
not like to think we can return money to the people. They do not 
understand this adds to our economy. I hate to think of where we would 
be today if we had not had the tax cuts because they have, in fact, had 
a positive effect on the economy.
  This is not a Republican idea. I remember a great President of the

[[Page 18825]]

United States in the sixties. It was President Kennedy. President 
Kennedy felt Government needed to do more for the Great Society. He 
said we are going to have to have more revenues. He said: The best way 
to increase revenues is to decrease taxes. So President Kennedy 
decreased taxes and revenues increased.
  Mr. President, I say to my liberal friends, I know they do not 
believe the private sector and individuals left with freedom in the 
their hands can operate as well as Government can. They are wrong.

                          ____________________