It's a theme

It's Econ 101 here at My Dogs this weekend. Keeping to the theme, I provide you this little tidbit from growth champion Larry Kudlow:

(Here are some new factoids to sink your teeth into concerning all the nonsense about wage inequality -- a subject that the brilliant Washington economist Alan Reynolds has debunked voluminously):

At $16.76, average hourly earnings are nearly 20 percent above year 2000 levels, and 44 percent above the $11.65 level in the fifth year of the Papa Bush/Clinton business expansion cycle.This is the fifth year of the GWB cycle.

Even in inflation adjusted terms, real average hourly earnings are slightly higher than the 2000 peak, and nine percent above the 1995 fifth year average level.

By the way, since President Bush’s supply side tax cuts in 2003, adjusted household jobs (a BLS combination of non-farm payrolls and the civilian employment household survey) have grown nearly 3 million per year over the past three years.

Incidentally, looking at strong profits and productivity, economist Mike Darda thinks the unemployment rate will fall below 4 percent.

It's still a theme:

His incredulity is not surprising, but it is wrong. The historical average for tax revenues as a percentage of GDP for the last 45 years—roughly, the span of the modern taxation era—is 18.2%; in 2006, the government collected 18.4% of GDP as tax revenues. Even if you throw out the Bush budgets of 2002-2006, the average rises only a tenth of a percent, meaning that America is still above its historical average. The same holds true for budget deficits. The historical average is 1.6% with the Bush years, 1.5% without, making last year's 1.8% budget deficit look less than outlandishly out of line.

The interesting thing is that no one knows these happy facts. Democrats are still harping on budget deficits as if (a cynic would say "because") they were a gigantic mess, rather than a shrinking problem. This is not an excuse for running deficits, of course; there is no reason that a prosperous nation should be borrowing money to run its government when the economy is booming. But America's budget deficit is small enough that it is now unlikely to be having any sort of measurable effect on the economy, and inflation and economic growth will quickly erode the value of recently accumulated debt. Mr Bush may leave a large number of problematic legacies for future generations, but the revenue shortfalls of recent years will not be noticed among them.