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Old 29th October 2004, 01:16 PM   #21
SY is offline SY  United States
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I'm talking about the government spending less. Less government spending = more private sector spending. And the private sector is more efficient and responsive to economic pressures than government. There are some nice illustrations of this in "Knowledge and Decisions" by the noted economist Thomas Sowell.
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Old 29th October 2004, 01:25 PM   #22
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I'm talking about the government spending less. Less government spending = more private sector spending.
I knew you where talking about government. But when the going gets tough the private sector reacts faster (cutting costs/investing less/firing people etc, etc.) exacerbating the malaise. That leaves only the government in a position to do anything about the situation.
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Old 29th October 2004, 01:30 PM   #23
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But the government can't really do anything in that situation without making things worse. That was Roosevelt's mistake. The money government spends has to come from somewhere.

Do they just print more? Welcome to hyperinflation.

Do they increase corporate tax burdens? Goodbye jobs.

Do they increase individual tax burdens? Goodbye food and housing.

Do they run deficits? That reduces money available to the private sector. Goodbye economic expansion. Reagan did this and left Bush I with the recessionary mess.
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Old 29th October 2004, 01:40 PM   #24
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Guess we can discuss this back and forth...but the blend is important..and no-one has the exact recipe all the time. Balance is the key word. Every now and then the balance goes missing.


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Reagan did this and left Bush I with the recessionary mess.
Kenichi Ohmae in the The Invisible Continent argued that Reagan's policies (while damaging in the short term) created the foundation for the exceptional growth and prosperity in the 90's
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Old 29th October 2004, 03:33 PM   #25
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Originally posted by SY
Cutting marginal rates is NOT the same thing as cutting tax receipts.
Who said anything about cutting tax receipts? Nobody cut any tax receipts. Tax receipts go up every year, just as the economy expands every year, because there are more people in the US every year, who pay more taxes every year. Normally, there are also more people working every year, but Bush the Son changed that.

The Federal government has to pay back the interest on it's debt before it can spend money on anything else. That interest is the direct result of budgets of previous years which did not balance, so money had to be borrowed. In 1980, for instance, the first thing that the government had to pay was the interest on the money it borrowed for the 1979 budget. And the 1978 budget. And the 1977 budget, etc all the way back. Hence, this official chart which shows the payments on the debt as a percentage of tax revenue.

Click the image to open in full size.


Borrow less, pay less money for interest next year. See how that works?

Well, Bush the Father didn't. But Clinton did.

First thing Clionton did was cut the deficit. He took office in 1993. If you look closely, you will see that it was 1993 when the deficit dropped tremendously:

Click the image to open in full size.

Look at that chart. Can you imagine the mess if Bush the Father had won in November of1992? He had the deficit skyrocketing. Clinton takes office-what a dramatic turnaround. And the country benefitted from it. Greatly.

That meant, of course, that less money had to be borrowed to cover the deficit in 1993. The first chart shows just how much less of the taxpayer dollar went to paying off the interest-starting early in Clinton's first term.

Once again, with feeling: cut the deficit so you borrow less, and you will pay less interest next year. Which makes it easier to come close to balancing the budget next year, so borrowing is even more curtailed. And the year after? The picture is even better.

No wonder the budget was balanced once Clinton was in office a few years.

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Originally posted by SY:
BTW, you'll note that the deficit numbers under Clinton shrunk mostly after '95.
Actually, no As the official chart plainly shows, the dramatic turnaround occurred in 1993, when there was a Democratic Congress. Yes, the numbers continued to improve once the Republicans took Capitol Hill in 1995, but the big plunge in the deficit occurred two years before the Republican majority ever got there.

And I might also point out that this same Republican majority who, once Bush the Son took office, let him drive the deficit way back up past where even Bush's father had driven it.

So it really is about who is in the White House, more than who is on Capitol Hill.
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Old 29th October 2004, 03:51 PM   #26
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The significance of all this history is that Bush the Son is basically pursuing much the same policies that his father did. His father left the country in bad shape, and Bush the Son is apparently intent on leaving it in even worse shape.

Bush's father's policies didn't work, neither did his son's.
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Old 29th October 2004, 04:10 PM   #27
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If you look closely, you will see that it was 1993 when the deficit dropped tremendously.
You've got better eyes than me. Maybe you can get that graph with an expanded scale. And hope that the expanded scale doesn't say what you're claiming, otherwise the severe drop is George I's doing- Clinton neither set nor signed the '93 budget.

It looks more to me like the deficit dropped back to Reagan-era ridiculous levels, then really nosedived after '94, hitting surpluses. I give Clinton credit for some of this (notably welfare reform and a bit less high-budget pork going to big defense contractors), but what really reined things in and allowed the economy to expand was Clinton and the Reps being too busy with their sideshow to do too much harm.

Of course, one might also argue that Clinton's parting shot, the massive antitrust action against Microsoft, was one of the precipitating factors in the bubble-burst.
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Old 29th October 2004, 05:13 PM   #28
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Default ALLRIGHT!!!!!

Now we have 2 mods on opposite sides of a food fight......

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All men in politics lie. None have lied as much as George W Bush. Apart maybe from Clinton on his affairs with women. But George's lies affect the whole world. Clinton's were pretty benign.
Read some of Dick Morris' books about Clinton. He, of all people, should be able to put things in their proper context.

Context in this case how he messed up dealing with the raghead terrorists. So, yes, Morris blames Clinton for being responsible for allowing them to be in a postioin to do what they did back in 2001........

Jocko
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Old 29th October 2004, 05:32 PM   #29
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Originally posted by SY


You've got better eyes than me. Maybe you can get that graph with an expanded scale.
Coming up later-maybe tonight.

Quote:
Originally posted by SY
And hope that the expanded scale doesn't say what you're claiming, otherwise the severe drop is George I's doing- Clinton neither set nor signed the '93 budget.
Clinton did not have anything to do wth the 1993 budget but Clinton had everything to do with the tax revenue the economy generated in 1993.

Early in 1993, Clinton had his Economic Stimulus package passed.

Look at the result. In an economy that is supposed to be expanding normally, Bush the Father averaged a 0.97% increase in income from individual taxes his last two years. That's right, less than a percentage point. After Clinton's Economic Stimulus package passed in 1993, revenue from individual income taxes went up 7% the first year!

Corporate tax income? Bush the Father averaged an increase of 3.6% his last two years. After Clinton's Economic Stimulus Package, the first year it went up 17%!!

THAT'S where the deficit went-Clinton 's Economic Stimulus package raised up revenue to cover the government's expenses.

Check it out yourself. Look up Table #3 at the Congressional budget Office website. Make sure it's Table #3-the other table gives it as a percentage of GDP.
http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0

Once again, we see that Bush the Son is a pale imitation of Bush the Father-and Bush the Father just wasn't that much. Clinton had to get the country moving again after the father left. And he did.

And now Bush the Son wants to follow his father's economic policies. Bad news.
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Old 29th October 2004, 05:32 PM   #30
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I haven't called Bas a tulip-sniffing chocolate-munching gouda-breathed windmill-tilter yet. When I do, THEN you'll see the sparks fly.
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