For those who believe it was the magic of Clintonion tax increases that balanced the budget I offered some data. Actual facts, in fact. From January 1993 through December 2000, (for the historically challenged, that is Clinton's term in office) he enjoyed a mean value of 3.85% for US inflation adjusted GDP. From January 2001 through December 2008 (Bush's term) the mean growth rate was 2.03. Sometimes it is better to be lucky than good. I'm not sure Bush was either, but Clinton certainly was lucky, in my opinion.
You can go to this website and play with the dates and look at the data yourself from 1947 onward.
http://www.tradingeconomics.com/economics/gdp-growth.aspx?Symbol=USD
The notion that our best days are behind us is a thought embraced by those who either lack imagination and/or don't understand how successful people think and act. Incentives work. More is created. More can be shared. Disincentives work, too. Less is created. There is less to share.
In the words of Margaret Thatcher, "The problem with Socialism is that sooner or later you run out of other people's money to spend."
Cheers!
Hags
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4 comments:
What? A strong GDP is the product of luck? Government policies don't effect the GDP for better or worse? You have summarized the Republican argument:
When good things happen under Democrats, it's good luck. When bad things happen under Republicans, it's bad luck. Simple!
Obviously, that isn't the case. Clinton's strong GDP numbers were a product of the Clinton administration and it's excellent, deficit busting economic policies.
GW Bush's poor performance was a cumulative report card on his administration's feckless policies. Take Clinton's tax structure that brings in 20% of GDP and gratuitously cut taxes to bring the take down to a stabilized 17% +/-. That way, you can double the debt in eight short years!
Economic policies have consequences, Hags. Like GDP growth. It ain't luck.
I'm always amused by those who cannot distinguish between correlation and causation. Who would claim that a change in the tax code structure would have an instantaneous effect when the process involves investment, business creation/expansion, growth and, finally, revenue and taxation?
There is no doubt that a tax credit for individuals that puts cash in a person's pocket results in a short term burst of speneding, but the consequences of a change in taxation rates takes longer to have an effect when considering job creation and GDP growth. I believe that Clinton got to harvest the benefit of the Reagan tax cuts and that Bush got to suffer the impact of the Clinton increases.
Probably hard for some to follow, but hey, I can only do so much.
Little Jimmy Ganem can probably draw on his background to help explain that correlation is one thing and causation is quite another.
Cheers!
Hags
Hags -
You are outsmarting yourself. I am well aware of the distinction between correlation and causation and I don't even have a degree from Yale University. Nonetheless, I am always happy to educate Ivy Leaguers when the opportunity arises.
Using your logic, we will give Jimmy Carter the credit for the economic boom of the '80's then, right?
The 1993 Budget Bill - passed without one Republican vote - did, in fact, cause the lions share of our 1990's prosperity. Rubin and Greenspan schooled Clinton during the transition, laying out the virtuous cycle that would be created if the budget deficit were to be STRUCTURALLY addressed.
The Fed would be able to keep rates lower with our fiscal house in order and the bond market vigilantes would be kept at bay as well. When you combine the beneficent monetary and fiscal policies with a stock market that recognizes the new environment in which they are operating, you get GREAT ECONOMIC RESULTS in short order. Like a 300+% increase in the S&P 500 over eight years (thanks largely to expanding multiples). You get a rather staggering wealth effect, which feeds the virtuous cycle further. Businesses are able to borrow more at lower rates to expand their business. And so on.
What does that all add up to? Significantly elevated GDP growth in the eight years following the courageous 1993 Budget Bill. To suggest that Reagan deserves the credit is rather cynical and a pretty obvious attempt to shift the credit from a deficit cutting Democrat to a deficit exploding Republican.
Class dismissed.
Hags:
If you leave out the ad hominem 'historically challenged' you might win the debate and get to go regionals!
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