How many of you have experienced an macro-economic conversation with a “liberal” and when they quickly find themselves unable to justify their positions they pull out what in their mind is the ultimate trump card, Bill Clinton? Obviously since I’m asking, I encounter this phenomenon often.
Then next exchange is typical, expected, and boring.
I’ll ask, “Why was President Clinton so great for the economy?”
Blank Stare followed by……”He balanced the budget, he gave us a surplus”
My next questions will be “What did he do that gave us those surplus?” (After recovering from the shock that I would ask such a question, blank stares and chorus of uhs and ums are sure to follow)
Then I’ll point out that deficits are increasing at record rates and throw out a simple lob-ball for them like, If surpluses (like the Clinton years) are good, then what the current administration is doing much be bad.
Then they will be so excited to be able to go to the other only tool they have in the toolbox and say every unfortunate event in human history is the fault of George Bush.
Let’s actually look at President Clinton and see if he deserves all this reverie. Will copying him in every respect bring us the prosperity and economic expansion we saw in the late 90s?
Other than being there while all of this economic expansion was going on, if you look at what was going on at the time, he didn’t really play much part in it. It really looks to me like President Clinton had several things going for him.
The main three things would be:
1) Low inflation/commodity prices
2) The end of the cold war and the subsequent reductions in defense spending
3) The Internet
Unfortunately, Bill can’t claim credit for any of these things.
As far as major legislation goes, President Clinton signed very little due to gridlock. (Which is probably a good thing) The one thing he made a large push for was universal heath care, which congress shot down. This defeat was probably pro-economy.
In 1993, the Democratic controlled congress passed a large tax increase with no republican support. Clinton signed OBRA-93 into law and the economy continued to be in recession and deficits increased. This helped launched the Republican Party to retake congress for the first time in 40 years. The Republicans, lead by Newt Gringwich, vowed to balance the budget. Balanced budget after balanced budget was sent to President Clinton’s desk, after 5 were rejected, finally the President relented and he passed a balanced budget.
Hundreds of millions in proposed social spending by President Clinton was shoved aside by congress.
In his second term, he did sign some pro-growth acts sent to him by the Republican Congress. The Personal Responsibly and Work Reconciliation Act in 1996 was part of the Republicans’ “Contract with American” and essentially fundamentally altered our welfare system ending welfare entitlements by placing time limits on funds. Then taxes on capital gains were cut by the bipartisan Taxpayer Relief Act of 1997.
One of the key sparks of economic growth is technological development. The Internet changed the way we work and the way we live. It was the main engine behind the 1990s economy. This entire new industry allowed for new business not before conceived to sprout out. Since it was new and the government hadn’t moved to regulate and control it, entrepreneurship was free to flourish and jobs and wealth were created.
The Internet deserves the majority of the credit for the Late 90s economic boom, not President Clinton. I’d give second place the the conservatives in congress. Unfortunately it didn’t take long for the Republicans to abandon the “Contract with America” and become big spenders themselves.
So, Clinton worshipers, let me know what you got.