Defending the Truth

In p8triot's introduction thread, RidinHighSpeeds made a post (New boot, Again.) stating that Bush's tax cuts fixed Clinton's recession. My opinion on the matter is quite different, so I thought I'd throw my views into the ring.

The recession that occurred during Bush's early presidency was neither Bill Clinton's fault, nor George W. Bush's fault. It is true that one had higher taxes, while the other had low taxes, but taxes simply don't have a huge effect on the economy.

If taxes were the cause of our recession, our economy would have gone downhill during Clinton's administration, when taxes were high and people had less spendable income. Almost as soon as Bush took office, he cut taxes, and almost as soon as he took office, the recession began. People suddenly had to pay less taxes, but our economy still sank. One would think the opposite to be true, but it wasn't. This is because taxes were not the cause of the recession.

So what was the cause of the recession? The Y2K bug, of course. You guys remember the Y2K bug, right? It was that famous problem in 1998-1999 when corporations realized that their computer systems would not correctly handle the date change from 1999 to 2000 because the systems only stored a two-digit year.

To correct this problem, corporations hired massive numbers of programmers to fix their applications, creating a lot of new jobs and providing an economic boost during 1998 and 1999. It is estimated that $300 billion dollars were spent fixing the Y2K bugs.

After the year 2000, these extra programmers became unnecessary, and corporations slowy began to lay off all of them, creating a huge group of unemployed programmers.

Furthermore, because the computer programming industry was so hot in the late 1990's, many people, including myself, had gone to school to study computer programming and were left unable to find a job in a saturated market.

Furthermore, during the late 1990's, technological advances were allowing more jobs to be oursourced to save money. However, because of the Y2K scare, technology was not seen as reliable, and companies were afraid to outsource. After the year 2000, the outsourcing which would have happened in the late 1990's was performed in the early 2000's, leading to a large group of people being laid off due to outsourcing.

These large groups of umemployed people created a ripple effect on our economy. Unemployed people can't afford to buy much, which hurts businesses. Unemployed people don't pay as much in taxes, which hurts funding for government programs. Employed people who have to take care of their unemployed family members can't afford to buy many luxuries, which hurts some businesses. As business sales slowed, more and more people had to be laid off.

There you have it. Recession.

Okay, so I don't totally blame the Y2K bug. I'm sure it had help: for example, the World Trade Centers collapsing made things worse.

But the tax policy of our presidents did not cause the recession; that's always been an irrational claim made by politicans who want to get elected or are too blind to look beyond economic taxation theory.

Bush hoped his tax cuts could prevent the depression. They didn't. Then he hoped more tax cuts would cure the depression. They didn't. The recession ended a couple years after conservatives predicted it would.

Why were they wrong? Because cutting taxes does not address the root cause of the problem. The root cause of the recession was economic factors like the Y2K bug, and the recession would continue until the people that bug affected could find new jobs.

But don't get me wrong: Bush's tax cuts probably helped make the depression a little less severe, and they probably helped end it a little sooner. Good job, Mr. Bush. However, I am not without my criticism of his actions:

First, Bush should have cut taxes on the lower class a lot more than he did. The vast majority of his tax cuts went to the upper class. The idea behind his tax cuts is that they'd allow businesses and business owners to be able to afford to hire more people. But that's only half of the equation: the consumers need to have enough money to buy new products, otherwise the demand for new products will be too low for corporations to want to hire new employees.

Second, if you're cutting taxes, you should generally cut spending to accomodate these tax cuts. Instead Bush increased spending, and few of his spending increases were directed at improving our economy. For example, he increased spending on Medicaid and Medicare during the recession, and he went to war twice. Had Bush spent less money, he might have been able to cut taxes even more, direct more money into our economy, and prevent the swelling of our national debt to some extent.

Third, Bush should not have made his tax cuts permanent. Our taxes should be cut in times of recession, but increased in times of prosperity in order to reduce our enormous national debt. Bush seems to want low taxes all of the time, and considering our national debt, that is bad policy. If Bush realized that the root cause of our depression was not high taxes, he might not be so deadset against increasing them again.

Finally, there may be a couple of presidents who made our depression worse than it needed to be: Bush Sr. and Reagan. These two presidents increased our national debt tremendously, and when you increase debt, future governments must pay for it.

Had our national debt been lower during the depression, Bush again might have been able to cut more taxes and put more money into our economy. We should count ourselves fortunate that Clinton reduced our debt, instead of continuing with the trend of spending money like crazy.

You don't understand macro-economics AT ALL, do you?

The economy of today is a reflection of decisions & policies from 5-10 years ago - NOT decisions and policies from 5-6 months ago.

Clinton inherited the strongest economy America has (very possibly) ever known. He left office with the country in recession. There's a reason for both of those FACTS.

It is a proven fact that tax cuts usually (though perhaps not always) stimulate economic growth. I could go into a list of all kinds of reasons, but you wouldn't read them anyway.

Reaganomics worked! No matter what the liberal media kept saying, or your Democrat friends. Taking the long view, and looking at the big picture, Reaganomics absolutely worked.

On the flip side of the coin, the Clinton era ushered in the biggest spending and tax increases in American history. The enormous tax increases initially brought in huge sums of money because the economy was so strong, due to Reaganomics. But Clinton's onerous tax increases eventually stifled the economy - leading to the slow-down and recession that were in full swing when he left office.


Now... have you been paying any attention to what's going on with the American economy recently? I bet you haven't - and the reason you haven't is because you don't WANT to know what's going on.

But check it out. Despite the fact that there's a hated Republican in the White House, the economy is in a HUGE up-swing that is picking up power and momentum. Hopefully the newly-Democrat Congress won't force enormous new tax increases that stifle the growth.

I believe I understand them well enough. The things you wrote do not make me think otherwise. Allow me to explain:

According to my post, it the economy today is a reflection of both the events of today, and the events of 5-10 years ago. Do I understand you correctly: you disagree that more recent events and policies affect today's economy?

And according to you, the reason is higher taxes, right? If the problem were taxes, then we should expect the economy to slowly dwindle throughout Clinton's presidency, as people take home less money and the economy begins to falter. Instead, we saw little sign of economic weakness until late 2000, after which there was a sudden economic downturn. Doesn't this suggest that a sudden event had a drastic effect on our economy? What makes you think taxes instead of a shift in the market?

Is it a proven fact? I am pretty sure it is economic theory: not fact at all.

However, I do agree with this economic theory. It's a very sound theory. That's why I said tax cuts stimulate the economy. But there would have to be a massive tax change in order to cause a recession: that isn't what caused the recession in 2001.

Yes, tax cuts can stimulate the economy. Like I said: Bush did a good job with the tax cuts, and he likely made the recession a little less severe and end a little earlier. I still had criticisms, but isn't it clear that I think Reaganomics is one part of a larger solution?

My criticism of Reagan is that he accumulated a huge debt, not that he cut taxes. Accumulating a huge debt is not part of Reaganomics.

Clinton's tax increases may have been stifling the economy, but they would not have stifled it anywhere near enough to cause a recession. They were ultimately worth it to reduce the debt accumulated by Reagan and Bush Sr.

The economy is doing much better today, as formerly-unemployed people are finding new jobs, with a bit of help from tax cuts. You may have noticed that I criticized Bush for not cutting enough taxes and for spending too much. So why are you acting like I don't think tax cuts were the right idea?

You claim that I wouldn't read your explanation about tax cuts, but when have I ever failed to read one of your posts? Don't I usually comb through every detail? Perhaps I could be even more thourough, but my posts are already long enough, I think.

The enormous tax increases Clinton ushered in TEMPORARILY padded the coffers. They brought in a lot of money SOLELY because the economy was so strong! But the Clinton tax increases also stifled the economy. That is why, several years later, we saw a RECESSION at the end of the Clinton years.

Clinton inherited, but taxed the life out of, an enormous economic boom - one that was brought about by the success of Reaganomics. He taxed the economy into a recession.

George W Bush instituted sweeping tax cuts. And guess what? Though it took a little time, it brought about an enormous boost to the economy! It IS happening, whether you and all the other liberals want to admit it, the American economy is currently VERY, VERY strong.



...and by the way, have you noticed how QUIET the liberal media is about the economy these days? 5 years ago, when the stock market plunged, they were all over it like stink on crap. Now, when the stock market continues to set record highs, nobody in the media is talking about it. Can you say "HYPOCRISY"? The economy is booming, and the media will NOT admit it.

People and plastic and poor health coverage are the reason we have not felt the sting YET!

Kansas City Star | 01/17/2007 | Report: People who charge health-care expenses getting in debt trouble

Wait till ths is realized!
It's The Debt-UWSA National Debt Clock

I love how you phrase that: "padded the coffers".
Clinton BALANCED the budget. He didn't "pad" any coffers.
He just made sure we weren't spending more than we were bringing in.

Fiscal responsibility.


How hilarious. "Several years later"...
It's funny how the cause and the effect are so disjointed for anything that the conservatives want to blame Clinton on.

And "stifled the economy"????
The economy was BOOMING under Clinton.

We ALSO saw a recession at the START of the Clinton years. Something that originated during BUSH SENIOR'S presidency.
Funny how you left that out.

By your logic (and creative story-telling), Clinton should still get credit for "pulling" us out of that one, shouldn't he???


Oh yeah. I almost forgot about how when Clinton (our 42nd president) took over from Reagan's presidency (our 40th presidency), we had an economic boom.

Cause you see, in the history reconstruction blindly embraced by some conservatives, Bush SENIOR'S recession never happened...

Clinton inherited a RECESSION.
Not an "economic boom".

Geezus Christ! It's amazing how black is white and up is down and conservatives can be given credit for the sun rising in the east, but the fact that the sun has to set is obviously the fault of the liberal...


George Bush's "economic" situation can be given credit to the IMMENSE SPENDING he has done on the WAR.
Not his fricken "tax cuts".
If you pump as much money into the economy as he has, OF COURSE the economy is going to boom.

Hell, I could walk out tomorrow with George Bush's "economic plan", and spend thousands on credit cards. Hey everybody, look at me! I am "economically booming" because there is a lot of cash flowing around me. Look at my success!

But the truth is that George Bush is spending money he doesn't have.
Operating off of a deficit is harmful. And while it isn't the only factor involved, it does harm the status quo.


Yeah. It's all a plot to get the black man...
< end sarcasm >

Bad news sells.
Good news doesn't sell as well.
THAT is the reason it's quieter.

I wouldn't call the American economy "VERY, VERY strong". It is certainly on an upswing, but there are still several states experiencing economic troubles: notably the one I live in.

Anyhow, regarding the 2001 recession...Simply through the natural course of the market, eventually there will be a recession, and eventually the recession will correct itself. It happens all of the time.

Hardcore Reaganomics people fail to take this into consideration. When Clinton cut taxes, the next recession would be blamed on him, regardless of when it occurred. When Bush cut taxes, he would be credited for the next economic upswing regardless of when that occurred. Nevermind that the economic upswing took place years after Reaganomics experts claimed it would take place. It still must have been caused by Bush.

But don't you think it might have been the natural course of the market? To judge the true effect of Reaganomics, let's examine this article:

FairEconomy.org - Research Library - Trickle-Down Economics: Four Reasons Why It Just Doesn't Work

The graphs presented in that article clearly show no correlation between upper-class tax cuts and economic performance. This means either one of two things: Reaganomics is a bunch of nonsense, or Reaganomics doesn't affect the economy as much as conservatives claim it does.

Now let's look at how Reaganomics affects our national debt, a debt which both sides agree is bad for future economies:

http://zfacts.com/p/318.html

Based on the facts and statistics, you might wonder why I give Reaganomics any credit at all. I give it a little credit, not because its effects are obvious, but because it is based on sound theory.

However, to suggest that tax policy caused the recession in 2001 is irrational. While theory suggests that higher taxes may have stifled our economy to some extent, there is no reason to believe that it would have stifled our economy enough to cause a recession, especially looking at our economy in the past, and looking at steady economic strength during the bulk of Clinton's administration.

And most importantly, there are very basic market-related reasons that a recession should have occurred after 2000, as I described in my first post.

Yeah, most media sources are horrible. It's not because they're liberally-biased, it's because most of the stories they cover don't matter, and when they finally do deal with an important issue, they're often wrong.

Blaming Bush for the failed economy is exactly what I'm talking about: the media was wrong. Another example: when that sniper was shooting people in Washington DC, the news blamed video games, specifically one called Counter-Strike. Of course, when the killer was caught, it was clear that he played no video games at all, and the media never corrected themselves.

Anyhow, yeah, I'm not a big fan of news from media sources.

You need to get your information from somewhere other then MoveOn.org.

What takes place today, economically, does not bear out its full brunt for several years. Anybody that knows anything about macro-economics knows that.

And the fact STILL remains that Clinton inherited an extremely strong economy - which he subsequently taxed to death. And if it wasn't for the temporary "dot.com" boom of the 90s, Clinton's tax increases would have led to a DEPRESSION instead of just a RECESSION.

But any way you ultra-liberals spin it, the American economy was in a recession when Clinton left office. It didn't get that way overnight.

By the way, would you care to tell me what the inflation rate, and interest rates were during the Carter years?

Spin away...

A lot of the issues have long-term effects.
Some are incredibly short-term.
Take the dot-com bust that happened under Clinton's administration when all the internet stock dropped virtually simultaneously. The 9/11 effect on the economy.


Again, FALSE.
Clinton inherited Bush Sr's RECESSION.

"It soon turned out that the quick recovery was illusory, and by 1990, economic malaise had returned. For the next several years high unemployment, massive government budgetary deficits, and slow Gross Domestic Product (GDP) growth affected the United States until late 1992 and Canada until 1995."
Late 1980s recession - Wikipedia, the free encyclopedia

It's funny (and telling) how you keep referring to it as REAGAN'S boom, ignoring the fact that there was ANOTHER PRESIDENT that was in office during that time.


"you ultra-liberals"? Feh.
I personally remember Clinton and Gore trying to claim that the economy was fine at the end of his presidency. Pure Bullsh!t.
But considering YOUR nature Jefferson, you'll never admit to what I just said.

Are you now going to insist for post after post that I didn't just admit the economy wasn't doing well at the end of Clinton's presidency?
--------------------------------------------------------

I'm just going to requote the stuff you couldn't address last time...

Geezus Christ! It's amazing how black is white and up is down and conservatives can be given credit for the sun rising in the east, but the fact that the sun has to set is obviously the fault of the liberal...

George Bush's "economic" situation can be given credit to the IMMENSE SPENDING he has done on the WAR.
Not his fricken "tax cuts".
If you pump as much money into the economy as he has, OF COURSE the economy is going to boom.

Hell, I could walk out tomorrow with George Bush's "economic plan", and spend thousands on credit cards. Hey everybody, look at me! I am "economically booming" because there is a lot of cash flowing around me. Look at my success!

But the truth is that George Bush is spending money he doesn't have.
Operating off of a deficit is harmful. And while it isn't the only factor involved, it does harm the status quo.

Jaxian wrote:Show us here where "Clinton reduced our debt".