Well, I've just not (as in over the last hour or so as I type this), learned a heckuva lot about how the economy works. Thus, I offer my delayed response to your post, Peter.
Now, first off, I think you've misunderstood me, though through NO fault of your own: when I say it's from the wrong perspective, I don't mean that there are many opionions and standpoints that need to be considered...I mean that there is a RIGHT way to look at this, and a WRONG way...and saying that the government having more money is a good thing is (most of the time) the WRONG way. If the government has a surplus/loads of cash, it means they've taxed us too much.
In respone to "why raise taxes? Why not cut programs" Cutting programs would have very strong side effects, much more so than raising taxes would. The US may temporairly gain some money, but it wouldn't last(where as in a tax raise, the money gained would be much higher). Also the cutting of programs would weaken the economy. The US pays for those programs so the economy does not have to. If the US didn't pay for police, fireman, or hospital workers, then the economy would have to, and thus the economy would be much weaker. Lets say you cut a program such as medicare. Again the economy grows weaker because thats more money it has to pay directly to the benegits that a program such as medicare provide. Not only would it weaken the economy, but cutting government funded programs would make it a less desireable place to live. Thus raising taxes is a much more logical step.
No! This is a basic economic principle: the government should not offer anything more than the basics. Here's why: the government will never spend your money as wisely as you could have. When the government taxes us to give us more social services, they're basically telling us we don't know how to use/spend our money, so they're going to take it and do the work for us.
The problem there is that all the politicans take their cut along the way...it goes through the political machine, and comes out considerably lighter in terms of actual cash...which is why we constantly pour more money into programs like social security, than we actually get out of them.
Cutting programs and giving the money back to the public is good for the economy. Raising taxes is almost never good for it. I recommend Henry Hazlett's "Economics in One Lesson." It explains quite clearly why the government can basically never spend money as well as the individual it takes it from. I can elaborate on this point a bit if you'd like.
Show me how Clinton actually hurt the US. Show how he was a bad president. Don't tell me he was a bad prez because he got some putang and it became public. I'm not concerned with that. That has nothing to do with the state of the US, that only has to do with his personal life. His doing what he did, did not hurt the US in anyway. If anything it strengthned it because it showed the US could deal with such scandals and still remain as strong as it did. I'm not saying I condone his lying under oath, it just has nothing to do with the general state of America. Show me how any bills he passed, any laws he passed, anything he did while in office actually hurt the US to a state lower than it was before. You won't think of much.
Hang on now. I never said Clinton was a bad President. Now, morally, he sickens me. In terms of honor, he is a complete disgrace to the office. I have no doubt he's engaged in many criminal activities, and knowingly lied/misled people constantly in an effort to cover his own lack of morals...
...HOWEVER, economically, I didn't say he was bad...but I'm hesitant to give him a whole lot of credit. To be honest, I'm not as concerned with Clinton's record as I am with Reagan's. Clinton was not bad for the economy...though he did make some mistakes. My real problem lies with Steve's ignorant comments about Clinton. Yes, ignorant. No offense to Steve, but I have serious doubts about his economic knowledge. I think he's shooting from the hip when insulting Reagan.
What you need to understand (everyone needs to understand this, actually) is that cutting taxes and giving the public a stable, healthy economy, will clear up any government problems. Reagan cut taxes, and also wanted to cut social spending, so that he could build up our military. Those on opposition stopped this from happening, and as such, social spending remained at it's current (at the time) level. What next? Well, Reagan's economy is cruising (due to his tax cut), and he says that we need a strong military, regardless of debt.
Now, let me ask you this: why do you assume Reagan put is into debt? If we're spending 1 trillion dollars a year on various things, and $200 billion of that is on the military, why is it Reagan's fault? Why not blame the people who refused to cut other programs? Doesn't seem to make sense to blame Reagan simply because his spending came after the others.
Reagan was completely right: a healthy economy, when simply left alone, will fix governmental debt. The military was improved, The Cold War was won, and the economy was kicking a**.
So, enter George Bush. Bush, having worked closely with Reagan, knew very well what was going on. The economy was growing, and as such, revenue was growing (it completely skyrocketed under Reagan, by the way). Now, if we were going to let all that extra governmental revenue pay off our debt, we had to make sure not to go spending all this new cash...we had to use it to pay off our creditors.
Bush had to compromise: he gave in and raised taxes, so that the other side would give in enough to put some spending caps in place. This was a necessary evil. Bush was naive for making a promise he could not keep, but his compromise was a good one. Once the spending caps were in place, all that extra tax revenue, that stemmed from the growing economy, was freed up to start paying down the debt. And despite popular belief (and a completely ignorant claim by Clinton), the recession under Bush Sr. was basically the smallest in American history...not the worst in the last 40 years, as Clinton stated.
Now, after this, Bush leaves office. Clinton wins, but before he is sworn in, he meets with Greenspan (I'm not making this up, BTW. This is not my "opinion" of the things that happened), Chairman of the Federal Reserve. At this time, Clinton has not taken office yet, but he's going to...he's won the election. People are vying for his attention and favor. A lot of Democrats want to increase government spending DRASTICALLY. Greenspan tells Clinton that the debt will completely take care of itself if spending is kept under control. Clinton, in what is a surprising decision to most, agrees with Greenspan.
Now, again, we have a compromise: Clinton compromises by raising taxes on the the wealthy. This doesn't have much effect, because there are very few wealthy people, and the economy and debt are kicking a** once again.
BUT, as the economy grows, and the deficiet is beat into the ground, we end up with more and more wealthy people, and his earlier tax hike effects more and more people. A lot of people are, all of a sudden, paying HALF of what they make to the government. People decide it's not worth all the trouble, and the economy starts to dip, which is why things took a turn for the worse shortly before Clinton left office.
It's also worth noting that Greenspan made a mistake when he saw the economy surging: he bought some bonds back, in an attempt to curb what he thought was inflation (it wasn't). Seeing as how that kind of economic growth had never really been seen before, it caused confusion, and he made a mistake. When coupled with Clinton's tax hike, which was now effecting many people who had become wealthy, we started to go downhill, which is where we are today.
Now, what can be gathered from all this? Several things:
- Clinton was not bad for the economy. On the whole, he was good for the economy, but he made a mistake which we're now feeling some of the heat for.
- Reagan certainly did not single-handedly send us plunging into debt. He built up our military and spurred major economic growth, which was CONTINUED thanks to a compromise made by both Bush and Clinton.
Thus, Reagan, economically, started a great trend, which Bush (having been his VP and all) picked up on and helped to continue, and which Greenspan/Clinton saw as a good idea...and so, they followed suit. Clinton needed convincing...which is why everyone thought he was going to go crazy on spending.
- Greenspan did a great job in convincing Clinton to curb spending. Clinton was wise in listening to him. I don't know if he NEEDED to compromise with a tax hike for the wealthy, but it was a bad thing either way. At the very least, Clinton should have reacted when he saw that his earlier tax hike was now effecting many more people.
That's the long and short of it. If I did say Clinton was a bad President economically in the past, I was wrong, but I don't believe I did. I do believe he was a disgrace, and a stain (no pun intended) on his office, but economically, he listened to the right people and made several good choices, as well as some bad ones. On the whole, a GOOD economic President...
...but Reagan was better. Reagan did so much. Quite frankly, I'm in awe of Steve's comments. I'd love to see him back it up with something.
I hope this clears my point up a bit, Peter. We are in agreement that from an economic standpoint, Clinton was a good President...but Reagan was better, and got the ball rolling with some very sound economic concepts. My real problem lies with Steve, and anyone else who claims that Reagan somehow hurt us...which is blatantly absurd.
See, I did reply! Took me 5 days, but I did it.
Reply to Topic
