“The surge in debt, asset prices,
and spending generated strong growth in profits. As total credit market debt
doubled between 1999 and 2007, so did profits—for both the financial sector and
the nonfinancial sector.
Higher income and higher profits produced higher tax revenues for all levels of
government. Federal tax revenues increased five times between 1980 and 2007.
State and local tax revenues rose three times between 1988 and 2007. The surge
in tax revenues made possible an even greater increase in government spending,
which, in turn, created still more economic growth.”
–Richard Duncan, The New
Depression