Posted on 08/28/2012 9:09:17 AM PDT by Kaslin
On the campaign trail, President Obama often makes references to Bill Clinton and the 1990s as proof that increasing taxes on the “wealthy” will be no impediment to restoring our nation's economic health. In fact, he truly seems to believe it is good for the economy, like having an extra portion of broccoli or something.
Now he even has Clinton himself, in a newly released ad, stating this is the case. Recently, at various campaign stops, Obama contrasted Clinton’s policies with the "trickle down snake oil" that Mitt Romney and Paul Ryan are selling. He added, “It did not work then. It will not work now. It’s not a plan to create jobs. It will not reduce the deficit. It will not move the economy forward.” Actually, it did work then, and Bill Clinton’s Presidency is the proof.
Clinton took office in the wake of the Reagan Revolution of the 1980s and contrary to the Obama campaign's recent assertion, the Gipper’s recovery far out-stripped Obama’s “recovery” by every measure. When Ronald Reagan left office in 1989, the economy had roared back from a recession that saw the GDP in America fall to -2.0 percent in 1982 and unemployment rise to 10.8 percent. One of the main impetuses for economic growth was cutting tax rates across-the-board, including the top marginal rate on the “wealthy” from 70 percent ultimately to 28 percent.
What followed was the greatest economic expansion in American history. Reagan created over 19 million new jobs, with a population of 85 million less than today, and unemployment dropped to 5 percent. Revenues to the Treasury almost doubled during the 1980s because of the incredible growth. With a few short-lived exceptions, the nation experienced a strong economy following the Reagan model for two-and-a-half decades.
One exception was in the early 1990s: the GDP growth rate dropped to -0.3 percent in 1991. This downturn came after the Democratically controlled Congress persuaded/forced the first President Bush to go back on his 1988 Republican Convention pledge --“Read my lips, no new taxes”--and raised taxes as a means to supposedly close the budget gap. The top tax bracket increased from 28 percent under to 31 percent.
Deficits actually grew over $150 billion after the bill’s passage. Rather than cutting spending as promised, Congressional Democrats increased spending, while revenues remained flat, and the economy faltered. (The elder Bush should have resisted this “deal” with the same fervor as his distaste for the aforementioned green, stalky vegetable). Shortly after President Clinton took office in 1993, he raised taxes still further bringing the top rate to 39.6 percent.
What was the cumulative effect of these tax increases? The economy did not bounce back as quickly as it did under Ronald Reagan. During the first three years of the Reagan recovery (1983-85) the economy grew at 5.3 percent (an incredible 7.2 percent in 1984 alone). During the first three years of the Clinton/Bush I recovery (1992-94), the economy grew at 3.5 percent. The maxim holds if you tax something more, you get less of it. Since over half of businesses are taxed at the individual tax rate, if you raise taxes, owners have less money available to expand their businesses and hire workers.
The 1990s economy Obama likes to laud, with its budget surpluses and incredible growth, occurred following the Republican Revolution of 1994, when the GOP took control of both houses of Congress for the first time since the 1950s. This rapid tidal shift came about in response to Bill Clinton’s first two years in office, during which he tried to implement government controlled universal healthcare and other big government initiatives.
The Congressional Republicans passed much of their campaign platform, the Contract with America , which called for smaller government and included cutting the capital gains rate from 28 percent to 20 percent and a $500 per child tax credit among other tax cutting measures. The Republicans also ushered in welfare reform, requiring people to work to receive benefits.
Clinton, after initially vetoing or threatening to veto much of the Republican agenda, got on board proclaiming during his re-election year of 1996, "The era of big government is over." The results: revenues rose from under $1.5 trillion in 1996 to over $2 trillion in 2000 (a $500 billion-plus increase) and the welfare rolls dropped nearly in half (by 6.5 million people) saving hundreds of billions of dollars.
During the last four years of Clinton’s Presidency, the annual GDP growth rate averaged 4.5 percent versus 3.3 percent during the first. Because of restrained spending (its lowest rate since World War II) and greater revenues, the nation experienced budget surpluses for the first time in decades and unemployment dropped to 4 percent.
Obama’s answer to his trillion dollar plus budget deficits and slowing economy is to raise taxes on the “wealthy,” to push forward with Obamacare, and to weaken welfare's work requirements. In other words, he’s replicating the early Clinton Presidency, while trying to peddle the latter one as proof his plan will work. Who is the snake oil salesman, again?
Clinton took office in the wake of the Reagan Revolution of the 1980s.
Media asleep at the wheel with Obama.
What we need now is reforms in the size of government and the income tax code to really get the US economy going again.
Clinton also lucked out in that he was saved from himself by a Republican congress.
I’d take Clinton’s tax levels, if we also got his spending levels. We’d have a huge surplus.
Let’s list other “differences”:
Clinton used the “peace dividend” (reducing defense spending and especially intelligence and the CIA budget). This helped lower the deficits but helped usher in Osama Bin Laden and Muslim terrorism.
Yes, there was significant job growth under Clinton — in part because of investments in the 1980’s (think internet, networking, biotechnology) that saw rapid growth in applications in the 1990’s.
George H. W. Bush was saddled with the S&L crisis: with the Feds having to take over failing S&L’s, costing the Treasury millions in the process... Under Clinton and the turn-around in S&Ls, the process was reversed and S&Ls were relaunched after being recapitalized. Another gain that Clinton had little responsibility for.
Clinton presided over “deficits as far as the eye could see”, until the GOP takeover of Congress. Give Clinton credit for not fighting the reduction in the capital gains tax rate because lowering cap gains rates resulted in a tsunami of tax REVENUES (this ALWAYS HAPPENS when Cap Gains RATES are lowered).
I’m sure there are many other points that informed Freepers could add.
Excellent points. The so-called “peace” dividend led to gutting of defense spending and Osama bin Laden. As much as 0bama wants to cut spending on defense, he has been very passive on this and if re-elected would likely follow Clinton and cut the defense budget significantly which he has already suggested he would do.
DON’T VOTE FOR 0BAMA!
The comparison of Obama and Clinton is laughable. They are polar opposites. Clinton made political hay of the battle with congress, but signed on to much of their agenda. Obama has refused to give an inch with Republicans. He ran farther left. Our side better be prepared to differentiate in a meaningful way over the next two weeks, or this narrative will stick.
Ping
As for the current "redistributionist," his promises are beginning to have a hollow sound.
Obama fits the image created by the following statement from a former President of a state manufacturer's association (way back when).
"Noah's principle: 'No more prizes for predicting rain, prizes only for building arks.'" - Arthur R. Gottschalk, President, Illinois Manufacturers Association
Enough "hope" and "change" already. It's time for building "arks" and other wealth-creating ventures which only come from the individual activities of free people. Forecasting is useless. Get out of the way, and let your bosses, "the People" do what free Americans did in the 18th, 19th, and 20th Centuries--before you "progressives" moved in with your competing ideology.
This last sentence is particularly telling, since public perception is that Clinton inherited a bad economy and saved it by raising taxes during his first term – something that has never happened.
By the same token, Clinton is generally perceived as having a stellar economic record during his own presidency, in spite of the fact that the economy was already starting to decline during the last year of his term after the stock market crashed in March 2000. According to a report by MSNBC: “The longest economic expansion in U.S. history faltered so much in the summer of 2000 that business output actually contracted for one quarter, the government said Wednesday in releasing a comprehensive revision of the gross domestic product. Based on new data, the Commerce Department said that the GDP — the country’s total output of goods and services — shrank by 0.5 percent at an annual rate in the July-September quarter of 2000.” (See: http://www.msnbc.msn.com/id/3676690/ns/business-stocks_and_economy/t/gdp-figures-revised-downward/#.UD0TtqPsacw
When GW Bush correctly warned the American voters about the nation’s declining economic performance during the 2000 presidential campaign, the same Democrats who had loudly criticized his father for “the worst economy in fifty years” had no problem at all accusing him of “talking down the economy.”
Congress, and Bob Rubin. Clinton used to whine that his number-one priority seemed to be keeping the bond market happy. He was frustrated his entire eight years in office by the failure of Hillarycare and his inability to pass some big, porkulent, steaming vote-buying program, but having to settle instead for dozens of "mini-initiatives" to keep control of the headlines.
It was Bob Rubin who made Slick eat his peas.
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