Clinton economy

[AndyP]

OK. One of my co-workers and I are arguing about why the economy was so good when Clinton was in office and now it's crappy under Bush. What steps did Clinton take to make the economy so good. My co-worker thinks that the rise of the economy in Clinton's administration and the fall of the economy in the Bush administration is just due to the natural rise and fall of the economy, saying that we cannot sustain a period of growth indefinitely.

I was a little too young to care when Clinton was President so I'm not really familiar with the steps he took to fix the recession that he inherited from Bush 1. I'll go look around and see what I can find, but I figured it would be quick to post here since everyone here is pretty knowledgeable. Thanks in advance

[Loonman]

1. Increased domestic spending

On social programs and infrastructure.


Every time a president has spent money on the American people, not for them, the economy has boomed.

[Beetwasher]

2. Clinton Raised Taxes on Rich People

And cut them for the poor and middle class and therefore had the revenue to balance the budget.

[GreenPartyVoter]

3. Bubble economy.... sadly the book cooking of Enron types

boosted the market in a lot of ways.

The big 'net explosion did too.

So the implosion of 'net sales and Enron and Tyco and WorldCom, along with 9/11 would still have brought on a recession.

However, this is not to say we can't get a decent economy going again! Dennis Kucinich has plenty of ideas how to do this.

[Az]

6. Have to agree

It was in large part due to the knocking out of regulations. Once the process began it turned into a run away process. All sorts of tricks were enabled to increase the apparent revenue of corporations. Sudden explosive growth allowed increase in hiring. Eventually though the pace came to a stop. And like Casey having burned all the coal the coprorations now must burn their infrastructure to maintain the pace established and demanded by stock holders.

It is unregulated unrestrained corporatism that has brought us to this place. We just had a meeting in our multinational company where they told us we did not make market expectations. Thus we are having another round of layoffs. This despite the fact that we keep hearing reports of record profits and our stock is doing better than others in our market.

[GreenPartyVoter]

10. What a crappy company you work for :(

Sorry to hear that.

[Richardo]

4. Balanced budget

More revenue from the rich...plus spending sanity

Note: FY 1994 budget (from the 1993 Democratic Congress) was the first to reduce the deficit in the Clinton years. Don't let the Pubs tell you it was the Republican Congress of 1994 that started to balance the budget.

[AndyP]

5. Sweet thanks

I'll gather my ammo and go shoot my co-worker down

[mopinko]

7. balanced the budget, but

just my personal opinion, as someone in touch with the IT sector, y2k. i have never seen numbers, but my own anecdotal evidence, fixing the y2k bug led to huge outlays for lots of businesses, especially the financial sector. it definitely tightened employment, and drove up wages for IT professionals. the passing of the millennium was the beginning of the end for the tech bubble.
ok, that part is just business cycle. but balancing the budget, and giving people access to higher education are important public sector engines of growth.

[damnyankee2601]

8. Don't take the bait.

Arguing about Clinton is a fool's errand. RWN's want to argue about him to distract from their own "leader's" miserable failures. Just tell them: Clinton's not president, the GOP has been in charge for 3 years. What have they done for me lately?

If you MUST go down this road, it's pretty straightforward:
1-Balanced the budget while still equipping the military to fight the Iraq war.
2-Paid down the national debt, making more capital available for private investment.
3-No wasteful, disastrous wars based on lies. They will counter that Bosnia and Kosovo were "wagging the dog." To which you reply: How many anti-Amercan bombings in Kosovao or Bosnia in the last 3 years?

[Skittles]

9. here ya go

http://www.academycomputerservice.com/economics/charts....

[AndyP]

12. Wow

that's a good website. Thanks.

[Skittles]

14. colors are good for conservatives

numbers just confuse them

[BillZBubb]

11. Here's the story--abridged version.

First, Clinton hired the best economic team this country has ever seen. Second, he met with Greenspan before he was inaugurated and they agreed on the framework for a fiscal/monetary plan. The Fed, to some degree, worked with the Clinton team.

Third, the Clinton team decided the key to getting the economy rolling from it's doldrums at the time was to regain the confidence of the bond market. They needed to bring real interest rates (rates adjusted for inflation) way down--particularly the longer term rates--and KEEP them down. Short term rates (controlled by the Fed) have less effect on capital spending (hence future growth) than longer term rates.

Three factors needed to be addressed to get and keep rates down. Inflation had to be kept low. The huge Bush budget deficits had to be slashed. And people had to believe it was going to happen.

To keep inflation down, the economy can't grow too fast. So they didn't want too much stimulus. IE, no huge spending increases. Just a little here and there targeted to get things moving.

They also couldn't drop the deficit too fast, because that would have lengthened the recession. Deficit spending is a stimulant to the economy. So, they decided to drop the deficit by about $50 Billion/year. It would take about six years to get balanced.

They accomplished their goals by raising taxes on higher income people, but keeping the middle class about the same. That meant that overall consumer spending wasn't effected much.

Basically, Clinton did the reverse of what Reagan/Bush* did. He decreased the deficit and raised taxes on the weathly. The Repugs did just the opposite. Gosh, I wonder which approach works better????

[AndyP]

15. Yeah and I thought

that the liberals were the tax and spend ones

[Bandit]

17. Tax and Spend is what government does

Liberals just manage government in an adult manner. They create surpluses while Republicans do the opposite. Virtually every single Republican Administration since Hoove has had a recession or depression during their terms. Democrats have had almost no recessions and no depressions. We just don't lie about it as well.

[ThomWV]

13. We'd Be In Pretty Good Shape Today

The Economy wouldn't be all that bad right now were it not for the Bush tax cuts. My point being that Bush actively harmed the economy, this isn't just a natural swing.

[fob]

16. You've gotten a lot of brilliant replies so I will offer some bs just

to keep your debate opponent guessing.

The Great Clinton Economy should be credited to Al Gore for taking the initiative in creating the internet.

No matter their response, repeat and repeat again.

[AndyP]

19. ROFL

[myopic4141]

18. Buying down the debt.

In the last years of the Clinton economy, the administration was using the surplus to buy down the debt instead of giving a tax cut. This infused money into the private sector without having the government compete for borrowed money. As a result, interest rates remained at a natural low rather than an artificial low giving the following growth correlation (year, USGD as a function of GDP, GDP): 1998, -1.39%, 5.57%; 1999, -1.89%, 5.61%; and 2000, -8.04%, 5.93%. 2001 saw no buy down of the debt from surplus; but, did see a tax cut. The final Clinton budget was in effect, no money was infused into the private sector, and the tax cut was not to take place until 2000 which resulted in the following correlation: 2001, -0.15%, 2.62%. 2002 saw a modest increase in the GDP; but, the government was well into competition with the private sector for needed funds giving the following correlation: 2002, 7.60%, 3.61%. Another factor that puts money into the American private sector is the trade surplus. For the years associated to those given, the trade surplus as a percent of GDP was: 1998, -0.04%; 1999, 0.25%; 2000, 0.24%; 2001, 0.22%; and 2002, -0.09%. In 1998, the deficit was offset by the buy down whereas in 2002, it was not. The conclusion is that debt buy down is a better way to infuse money into an economy than a tax cut. An added advantage not mentioned is that a buy down reduces the cost of doing business in the out years via reducing the debt service cost whereas borrowing increases the out year debt service cost.