The Democrats really love to harp on how great the Clinton years were. The budget surplus. The prosperity. Ahh the good life.
In seeking to duplicate those great times, Obama is hiring most of Clinton’s old staff. As usual though, they seem to forget history or just choose to ignore the facts. So let’s look at how Clinton’s two terms really went.
Before Clinton took office, several innovations were in the works that were prepping the economy for lift off. For the most part, personal computing was really starting to come into its own. That lead to an enormous internet boom.
But let us back up just a minute. For the first three years of his office, the economy pretty much went nowhere. It wasn’t until the GOP took office, combined with Hillary’s failure to get her health care plan through and Greenspan’s loosening of monetary policy did the economy take off. The chart below says it all.
Source IBD.
What about that budget surplus?
As for the budget surpluses, they came as a complete surprise to Clinton economic forecasters, whose static models only predicted their tax hikes on the rich would narrow the budget gap, not get it into the black.
Their “deficit-reduction plan” didn’t create the surpluses at all. They were a direct result of a tidal wave of capital-gains revenues generated by the GOP-led stock boom.
Relieved that Washington would no longer threaten to take over 14% of the economy by socializing medicine or raise taxes even higher, the market took off like a shot at that point. And capital gains tax receipts exploded, flooding federal coffers.
Clinton’s own long-term budgets predicted no surpluses of any kind during his administration and beyond.
In 1993, Clinton made his first five-year budget projections based on the new tax and spending programs he was proposing. He forecast a budget deficit of $202 billion in fiscal year 2000. In fact, the Treasury produced a record surplus that year of $236 billion.
That’s a swing of more than $400 billion. So much for central planning.
Clinton either must admit to some of the worst forecasting in history or acknowledge that some other factors besides his record tax hike closed the budget gap. But he’s copped to neither.
So, if Obama wants to duplicate the “success” of Bill Clinton, he needs to wait until 2010 and pray that the GOP takes over congress and gets things straightened out.
November 15th, 2008 at 11:45 pm
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November 16th, 2008 at 2:36 am
[...] How Obama can repeat Clinton’s economic success In seeking to duplicate those great times, Obama is hiring most of Clinton’s old staff. As usual though, they seem to forget history or just choose to ignore the facts. So let’s look at how Clinton’s two terms really went. … [...]
November 16th, 2008 at 2:46 pm
First Obama and his Liberal ilk with the help of RINOs would have to lay off of the economy and private business.
They would replace Nancy Pelosi with Newt Gingrich and have “Contract With America” Part II.
Then they would have to pray for Part II of the entrepreneurial boom and a second wave of the technology boom.
The stars were aligned and the politico’s are always taking credit for what private business succeeds at. Then when they meddle ala Fannie and Freddie it’s business that is all wrong.
It’s not the “economy stupid”, it’s the politicians that are stupid. Indeed!