Ain't it great livin' in Texas!!!!

Status
This old topic is closed. If you want to reopen this topic, contact a moderator using the "Report Post" button.
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.
 
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.
 
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.
 
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.


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
 
diyAudio Moderator Emeritus
Joined 2001
SY said:
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.

An externally hosted image should be here but it was not working when we last tested it.



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:

An externally hosted image should be here but it was not working when we last tested it.


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.

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.
 
diyAudio Moderator Emeritus
Joined 2001
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.
 
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.
 
ALLRIGHT!!!!!

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

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
 
diyAudio Moderator Emeritus
Joined 2001
SY said:


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

SY said:
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.
 
diyAudio Moderator Emeritus
Joined 2001
SY said:


You've got better eyes than me. Maybe you can get that graph with an expanded scale.

Actually, instead of messing with Microsoft Paint, I will just quote the figures, from Table 1 of the Congressional Budget Office link I gave before.
http://www.cbo.gov/showdoc.cfm?index=1821&sequence=0

The deficit Bush's last two years:
1991: $269.3 billiion
1992: $290.4 billion

The deficit Clinton's first year:
1993: $255.1 billion

The extra revenue Clinton's Economic Stimulus package generated helped cut the deficit by $35 billiion dollars his first year in office.
 
Morris blames Clinton for being responsible for allowing them to be in a postioin to do what they did back in 2001........
Yes...Apparently "Henry Kissinger, one of the most notorious Arab haters, purged the State Department and Security apparatus of "Arabists" with the result that the US today finds itself unable to converse with the Arab world, let alone have a decent relationship with Arabs and Muslims. "
Source : http://www.gulfnews.com/Articles/Opinion2.asp?ArticleID=130528

I read also there was a second wave of this purging under the Clinton administration...so yes partly responsible...

However Jocko you probably are refering to the fact that Clinton took no overt action against Afganistan...But in my estimation there is no way he could have gotten away with that...

Whatever happened in 2001 was set in motion many administrations ago and continued by subsequent administrations. But I am probably venturing into dangerous territory now!!

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.

No way...you can call me whatever you like... won't get me upset.
:angel:

Morris blames Clinton for being responsible for allowing them to be in a postioin to do what they did back in 2001........
PS..In the years to come people will be blaming Georgy Boy for allowing whatever is inevitably going to happen!!!....or more likely they will blame Kerry for what the Bush administration has done...(For Fox viewers I'll explain what that is...set America back 30 years in international relations and creating a whole new generation of human bombs. I.e. going for Iraq instead of terrorists)
 
Well, kw, you've left out a couple of things. First, the '93 budget was passed during the Bush I administration. If you want to congratulate someone for getting the deficit down from $B270-290 to $B255, congratulate Bush.

But I wouldn't. Look at the rest of the numbers in the chart you linked (good job on that, BTW!):

1993- $B255
1994- $B203
1995- $B164
1996- $B107
1997- $B22
1998- $B69 SURPLUS
1999- $B126 SURPLUS
2000- $B236 SURPLUS

I'll leave the graphing of percent decrease in deficit versus year to others, but it sure looks to me like the biggest drops, in absolute and relative terms, happened with the split government post '94.
 
Jocko Homo said:
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

My,my how things change. To think these same 'ragheads' were heroes when they were blowing up Russians with their car-bombs.
In no way can Clinton be blamed. The die was cast long before he entered office by the neocon nutters now pulling GWBs strings.
I recently saw a clip of a debate between Vladimir Pozner and Richard Perle where Pozner was saying the Russians would like to withdraw from Afghanistan but they would like to leave a stable country behind and in order to do this they would need American help. Perle replied that the Russians had invaded in a few days and could leave in a few days and the Afghans can be left to their own devices. The roots of todays problems stem from the refusal of the Reagan adminstration to aid the Russians in cleaning up the mess that was Afghanistan, a mess created in large part by the US encouraging every kind of Islamic fundamentalist nutcase to go to Afghanistan. The rest, as they say, is history.
 
diyAudio Moderator Emeritus
Joined 2001
SY said:
First, the '93 budget was passed during the Bush I administration. If you want to congratulate someone for getting the deficit down from $B270-290 to $B255, congratulate Bush.

Let's take a look at the Federal budget of 1993-the year Clinton took office.

In 1992, Congress and the President did a survey of how much money various Federal departments needed for the year 1993. At the same time, goverment economists were estimating how much money the government would take in from personal and corporate taxes in 1993 to pay for these outlays.

An outlay is merely a promise to supply funds for a certain department the following year. Raising the money to cover to cover that outlay is a separate issue.

In 1992, they passed the budget for 1993. They estimated the deficit-the difference between what they planned to spend in 1993, (outlays), and how much revenue they estimated they would raise in 1993-as about 327 billion dollars.

That estimate was based on the revenue growth of the Bush Administrtion, which was anemic. For the last two years of his term, revenue from personal tax went up less than 1% a year. By contrast, the average rise in revenue from personal income tax, from 1962 to 2000, averaged 8.5% a year. And Bush was averaging less than 1% a year!

Please note-the 1993 budget was written and passed in 1992, before Clinton ever took office, but the outlays in that budget were paid for from revenues raised in 1993, when Clinton was in office. Actually, Bush was in office the first few months of that fiscal year, but Clinton was in for most of the year.

So the budget was written in 1992. But the final deficit for that budget was determined by the money collected by tax revenue while Clinton was in office.

So the budget deficit that was estimated for the 1993 budget was $327 billion dollars. However, early in his term, Clinton got Congress to pass his Economic Stimulus package. This got the economy rolling.

Insted of a measly 1% increase from the year before, like Bush was doing, revenues from income taxes increased 7%!

The extra money collected by that revenue jump went to reduce the deficit down to $255 billion, instead of the $327 billion that was estimated under Bush.

Are we clear on this now? Bush simply drew up the outlays needed for 1993. Clinton paid for those outlays once he took office. And since Clinton raised much more revenue than Bush did, (due to his Economic Stimulus package), he was able to cut the deficit in Bush's budget from $327 billion down to $255 billion his very first year in office.

So as you can see, little or none of the deficit reduction in Clinton's first year, (1993), was due to Bush, despite the 1993 budget being written and passed under Bush.

I hope this clears things up. :)
 
diyAudio Moderator Emeritus
Joined 2001
SY said:

1993- $B255
1994- $B203
1995- $B164
1996- $B107
1997- $B22
1998- $B69 SURPLUS
1999- $B126 SURPLUS
2000- $B236 SURPLUS

I'll leave the graphing of percent decrease in deficit versus year to others, but it sure looks to me like the biggest drops, in absolute and relative terms, happened with the split government post '94.

I am going to post the deficit graph again, just to illustrate a point. As you can see, Clinton took office in 1993, and the deficit immediately took a plunge in the right direction.

An externally hosted image should be here but it was not working when we last tested it.


You can see the dramatic improvement in the deficit picture as soon as Clinton took office and got his Economic Stimulus package passed.

Under Bush, the deficit just went up, up, up. Immediately after Clinton took office, the deficits went down, down, down. That's what is important.

The Democrats were in control of Capitol Hill Clinton's first two years in office, when the dramatic turnaround occurred. The Republicans were in control of Capitol Hill Clinton's last six years.

Monetarily, the drops in the deficit were slightly higher under the Republicans, but when you consider the fact that both the economy and the revenues were considerably larger by 1997 than they were in 1993, things even out quite a bit.

Simple fact is, Clinton and the Democrats turned things around completely, as the chart indicates. If the Republican wish to come along well after the corner was turned by Clinton and the Democrats and marginally improve things later, more power to them. :)

Just note who dramatically got things turned around and pointed in the right direction. That is the important thing.
 
One minor correction before I do the analytics- the Senate was Republican in '93, so there was already some split in gov't control. The House went Republican (initiating the Lewinsky Era) in '95. And '95 to '96 was the biggest drop, in absolute and relative terms, of the deficit to that point. Until '96-'97 when it got even bigger. I wouldn't call that a "marginal" improvement.
 
diyAudio Moderator Emeritus
Joined 2001
SY said:
One minor correction before I do the analytics- the Senate was Republican in '93, so there was already some split in gov't control.

Sorry, that is incorrect. There was no party sharing at all-the Democrats were in control. The breakdown of the 1993-94 Senate was:

103rd Congress (1993-1995)

Majority Party: Democrat (57 seats)

Minority Party: Republican (43 seats)

Note: Party division changed to 56 Democrats and 44 Republicans after the June 5, 1993 election of Kay B. Hutchison (R-TX).

http://www.senate.gov/pagelayout/history/one_item_and_teasers/partydiv.htm

The Senate Majority was George Mitchell, Democrat of Maine. :)
 
Status
This old topic is closed. If you want to reopen this topic, contact a moderator using the "Report Post" button.