The 90s Economy

[AJH032]

Every time I discuss economic policies with my republican friends, I always talk about the steadily declining unemployment rates, deficit reducing balanced budgets, and low inflation under the Clinton administration. But they always say the great economy of the 90s was only a result of the "tech boom" and Clinton had nothing to do with it. It seems to me they're only taking the facts and making excuses for them because the facts don't support their side. But can any of you give me some concrete points for why they're wrong and why Clinton's policies did have a positive effect on our economy? I would appreciate it very much. Thanks!

[phantom power]

1. maybe a slightly different approach

I wouldn't try to get into proving some connection between Clinton's policies and the economy (unless somebody else knows a good connection)

For my money, the better question to ask is: If GOP tax-cut policies are so great for business, why was the economy so bad under both the Bush *and* Reagan administrations. And if Democratic economics is so terrible, then why didn't Clinton's policies *kill* the economic boom of the 90s?

Furthermore, why did the American economy grow so strongly in the decades after WWII, when we had very progressive tax system, i.e. very high rates of taxation on the wealthy?

Oh, and another thing. Forget comparisons. Just ask these people who they think is going to pay back the interest on the record deficits that Bush and the GOP are running. Ask them how long their *own* houseold would last, if they applied deficit spending in the same way.

[AJH032]

5. Yep

"For my money, the better question to ask is: If GOP tax-cut policies are so great for business, why was the economy so bad under both the Bush *and* Reagan administrations. And if Democratic economics is so terrible, then why didn't Clinton's policies *kill* the economic boom of the 90s?"

That's almost exactly my usual response. Works every time.

[Warpy]

2. The Clinton boom had much more to do with taxing the rich

and putting more money into the pockets of the working class via the EITC and a rise in the minimum wage than it did with the tech boom, a bubble that employed a rather small segment of the population.

What skimming more money off the top and recirculating it at the bottom does is spur demand for goods and services, and that is what causes a boom in any economy.

It's high time to take this debate back, reframing it in the context of DEMAND SIDE ECONOMICS. Supply side lunacy has just about run its course, with the consumer market being choked off and jobs being lost forever, while the pipeline is choked with goods and services few can afford.

Screwing the spending class in favor of fattening the hoarding class has never worked throughout history. Wealth stagnates at the top, and no new wealth is created.

Remember, rich men never give you a job. Poor people who buy the goods and services you produce are the ones who give you a job. The rich just profit from the transaction that results.

[suziedemocrat]

3. I get the same thing. Clinton was "Lucky".

And I guess Bush is "unLucky". I tell them I'd feel a lot better with a "Lucky" president!!!!

[caledesi]

4. It was ALL Clinton and his Economic Expertise.

The "tech boom" is a smokescreen.

In 1993 Clinton put forth a budget that NO Republican signed on to. OxyRush, Newt etc. warned how this would have a devastating effect on our economy and that Clinton raised taxes.

Yes, part of the package was to raise taxes of the VERY RICH, not you or me - in fact our taxes were lower.

So, Clinton being brilliant in Economics (Rhodes Scholar) etc. knew what he was talking about. The rich got richer and the POOR got richer. We had the first surplus since...I don't know Nixon.

Long time...meanwhile this idiot spends everything including SS and does a flim-flam job on some decent Americans, by "giving" them a tax refund. No, there was no tax refund. It was a loan to be paid by at tax time. Hey, don't believe me? Did your home taxes go up? Bet they did...see what I mean.

And as far as IT jobs, if we stopped outsourcing them...there would be no problem.

Just "Google" for the facts on the Clinton economy and why we had 8 years of true peace and prosperity, not terra, war 24/7, and no jobs.

[seasat]

6. Link to the accomplishments of the Clinton administration

I'd seen this on the web in a few places. I should answer most of Clinton's critics.

(LINK)

[AJH032]

7. Another question

How did the deficit-free balanced budget have a positive and direct (or indirect) impact on average Americans?

[seasat]

9. It helped to lower interest rates and increase cofindence in the $.

When you lower the deficit there are a lower number of government bonds to sell to fund the deficit. That means buyers will bid up the price. As demand increases for scarce bonds that also means that the government can pay a lower interest rate. Since US bonds compete with private debt notes, interest rates within the economy drop. The lower debt also increases foriegn confidence in the US dollar since it makes US debt more stable. More investment flows into the US. Those dollars are necessary to balance out our trade deficit and keep the dollar strong. A strong dollar means lower inflation.

Shrub Inc. is bascally pursuing the opposite strategy. We're seeing signs of inflation and the Fed is having to raise interest rates by putting more US bonds on the market. The results are opposite and it hurts the economy.

[hfojvt]

8. tell them they are disagreeing with Alan Greenspan

Greenspan said to Clinton:
"My colleagues and I have been very appreciative of your support of the FED over the years, and your commitment to fiscal discipline, which ... has been instrumental in acheiving what in a few weeks ... will be the longest economic expansion in the nation's history."
quoted in "It's still the economy stupid" by Paul Begala

[jmcon007]

10. This will definitely help...read this.

Below will give you an idea as to what went on at the time Clinton was president.
I remember a couple of things very clearly from this period of time. Not a single Republican voted for this budget and I remember Bob Dole warning that if Congress passed this bill interest rates would begin rising immediately. Yeah, right. When the economy started booming the Pukes starting saying that it was the "Reagan economy picking up steam, in spite of what Clinton had done." , etc.
One thing I believe is, like a child, Wall Street respects (fiscal) discipline and responds in a positive way. Say what you want about the Clinton years, it was a time of taking responsibility with the budget process and that alone creates confidence on Wall Street, in the market place, and among consumers.


http://www.dickinson.edu/~rudaleva/greenspan.htm

On February 19, in testimony before the Senate Banking Committee, Greenspan said that the Clinton plan was "serious" and "credible," making headlines with his support. Greenspan thought that Clinton had broken the gridlock on dealing with the deficit. He couldn't say it publicly, but he believed the president had displayed an element of political courage. He was taking a stance that some in his own party would fight him on. In Greenspan's view, Clinton deserved commendation if there was any justice in the crazy town of Washington.
In August, Clinton's deficit-reduction plan passed Congress by the narrowest possible margins, 218 to 216 in the House, and 51 to 50 in the Senate, with Vice President Gore breaking the tie. Not a single Republican had voted for the plan, which cut $ 500 billion from the deficit over the next four years by increasing taxes and cutting some federal spending. The only real Republican support had come from Alan Greenspan.

[phantom power]

11. Here's an article on the same subject

Our text today is the statistical tables of the 2005 Economic Report of the President. I did this exercise a while back with the 2004 tables and couldn't quite believe the results. But the 2005 data confirm it: The party with the best record of serving Republican economic values is the Democrats. It isn't even close.

The Republican values I refer to are universal. We all want prosperity, oppose unemployment, dislike inflation, don't enjoy paying taxes, etc. These values are Republican only in the sense that Republicans are supposed to treasure them more and to be more reluctant to sacrifice them for other goals such as equality and clean air.

Statistics back to 1959 make this clear. A consistent pattern over 45 years cannot be explained by shorter-term factors, such as war or who controls Congress. Maybe presidents can't affect the economy much, but the assumption that they can and do is so prominent in Republican rhetoric that they are stuck with it. So consider:

Federal spending (aka "big government"): It has gone up an average of about $50 billion a year under presidents of both parties. But that breaks down as $35 billion a year under Democratic presidents and $60 billion under Republicans. If you assume that it takes a year for a president's policies to take effect, Democrats have raised spending by $40 billion a year and Republicans by $55 billion.

http://gadflyer.com/flytrap/index.php?Week=200513#1655