Posted on 04/25/2011 3:29:33 AM PDT by Son House
RUSH: We start in Indianapolis. This is John. Great to have you, sir. You're up first. You set the tone for the day as far as callers are concerned. It's a very important role that has befallen you.
CALLER: Hey, Rush. I know it's a heavy responsibility. Hey, the reason I'm calling is there's talk out there now about how the great Clinton tax increase of the early nineties spurred economic growth, and it's a lie that we have to keep combating. I know you do it but what people have to remember is that in the wake of that Clinton lost the Congress, and as a result of that there was this tension and we didn't have a lot of spending -- plus we cut capital gains -- and that's what spurred the economic growth of the nineties. Then you've got people like Ben Stein, supposedly on our side, arguing that we need to increase the, quote, "taxes on the rich."
RUSH: Here's the answer to that. I came up with the answer to that last week or earlier this week. If everybody says that we need to revisit the Clinton years and if they say, "Look, at the Clinton years! Look at the great booming economy we had with the great, great Clinton tax increases." Okay, fine. Let's go back to the Clinton spending levels, too! I mean, if we were in such a boom economy -- if everything was just rolling right along, if everything was hunky-dory -- then how in the world could we be harmed by going back to the Clinton-era spending levels? But here again another problem:
Intellectually, you and I know that the Clinton tax increases retarded economic growth in the nineties; that the economic growth of the nineties that happened was still an offshoot of what happened in the eighties with Reagan. Had the Clinton tax increases not happened, the economic growth would have been even better than it was. The American people simply were not able to be shut down and stopped. Circumstances today are different. The government's gotten even bigger. We're more in debt. The more government borrows the less capital there is in the private sector for expansion.
Today there's no desire for expansion of the private sector. There's no confidence. There's no confidence among people who would want to invest in a company and grow it. You have exceptions to that, but for the most part you have an entirely different circumstance today than the nineties. The left is really on thin ice if they want to go back and say, "Hey, hey! Look at the tax increases back in the nineties! Look what it produced!" Yeah? Let's go back to those spending levels, how about that? Did the country fall off the cliff? Did Medicare recipients end up dying? Were old people eating dog food? Was it so bad with Clinton's spending levels in the nineties?
Let's go back to that. You know, whenever we advance the notion we should genuinely cut spending, reduce the size of government, "No! No! Oh, my God, look at the calamities that would strike! Old people would die," all these dire predictions. Well it didn't happen in the nineties, and government spending was a lot less then than it is today. So that is how I deal with that whole thin-ice explanation of the nineties and how Clinton's tax increases led to a giant boom.
Well...
The Internet going main stream had something to do with the boom of the 90’s...
In truth much of it was a technological boom centered around the Internet/Web that later turned into a major bubble.
In truth much of it was a technological boom centered around the Internet/Web that later turned into a major bubble.
Exactly. the 80's boom was a product of Moore's Law dramatically improving business productivity with the advent of the PC on every desk.
The 90's was driven by Metcalfe's Law which described productivity related to number of network nodes. Unfortunately we haven't had any major breakthrough's like those two products in the last decade.
Then we cut spending and the country grew.
GOP house & Senate. Clinton signed the bills.
Lets not forget the Y2K scare that prompted just about everybody and every business to go out and buy new “compatible” computer equipment.
How many billions did that inject into the economy?
Not only did it increase the productivity of existing business, the IT and Internet boom represented a massive new industry which didn't exist 10 years previously. Trillions of dollars of new wealth were created out of thin air by the ingenuity and industry of productive men under a capitalist system. Economics is not a zero sum game.
Economics is not a zero sum game.”
Unfortunately, about 40% of America (though they don’t understand it) believe precisely that, and about 20% are not sure what they believe, but they cast the deciding votes every election....at least for now, that 20% are on our side. So I suppose that’s a good thing.
But unless that 20% at some point begins to understand the nature of economics and the nature of reality, we are going to continue to slide....
I guess any mention of the “Peace Dividend” which Reagan gave us has disappeared down the Memory Hole.
You are forgetting cell phones were just starting to spread out. Also, a big piece of the Clinton surplus was due to the pcs auction.
The 1990’s economic boom was caused by cheap money, people cashing out on ridiculous property appraisals, treating their homes as a credit source, and an influx of foreign investors. It came crashing down in 2000 through 2002.
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