I never said Bush was great; I disputed your theory that we're somehow safer when the robber-barons are Dems rather than Reps. But since we're on the subject, don't forget that the Bush Administration's hands were tied by the "Gorelick wall", preventing sharing of info between agencies. Gorelick, of course, being a Cinton Defense Dept. appointee. The 9/11 Commission downplayed Gorelick's contribution to the wall, but acknowledged that the obstacles that could have allowed us to "connect the dots" in time to prevent 9/11 had been gradually put in place since the 70's.
Then you would have created less economic stimulus than Bush's tax cuts. Bush tax cuts for the middle class were substantial. The dollar value was higher for the rich because they pay more taxes to begin with but that does not cancel out the effect of the middle class tax cut stimulus. The upper class tax cut also has a stimulus effect because the upper class are more apt to purchase big ticket items and they also invest the money in the private economy that otherwise would have went to the government. OK but this is not an economic stimulus policy. Remember my original question was what policies would have been better to turn the ailing economy around that Bush inherited? Unless you think wars should be decided based on the economy and not need? So if your middle class tax cuts along with some fed funds rate cuts didn't seem to be spurring the economy along you wouldn't have cut fed funds further? Remember there was the Nasdaq crash and 9/11 in which the Dow Jones had an all time record one day point loss. These were tough times and this required drastic measures to get the economy going. Earlier you are for cutting taxes and now you are saying Bush should have raised taxes. Regardless, raising taxes at a time when investors lost tons of money in the financial markets due to the Dot.com bust and 9/11 along with the ailing economy would have been ludicrous. I don't buy the argument that Bush controlled Greenspan. I recall many financial analysis complaining that Greenspan's reaction was too slow to drop the rates. Where is your evidence that Greenspan's actions were controlled by Bush? I would not have either but this bill didn't go into effect until 2004. Once again I'm looking for specific policies you would have sought to get us out of the slow period which started in early 2001 and then the recession later that year. Not all on Carter just like the slow economy we are having now is not all on Bush. Greenspan had to take drastic measures to spur the economy because of the Nasdaq crash and 9/11. As you have pointed out some of those drastic measures had unforeseen consequences that we are dealing with today but I argue those drastic measures were needed at the time. Otherwise, the economy would have not had consistently performed better each year from 2002 to 2006 and perform solidly in 2007. Clinton was able to cut military spending to balance the budget because the Cold War ended. Bush and Greenspan did use plenty of weapons but needed to use them further because the economy was not reacting enough to those weapons. The fed did cut interest rates and had to keep cutting to get the economy moving. Was the tax cuts for the middle class not enough or is your only beef the tax cuts for the rich? I don't think Clinton caused it.
Propaganda. Why did Bush's stimulus checks in May ONLY go to the poor and middle class? Because the spend them. The rich save them. Or in the last 10 years, they invested in new plants in China. If my tax cuts to the middle class would have been worse than Bush's that gave the average guy in the top 1% of wage earners a $40,000 tax cut, then you would be arguing that tax cuts do no good at all, since the Bush tax cuts produced the weakest recovery since the depression. War is a total commitment of the nation. Everything will be affected, primarily spending dollars, natural resources, lives of soldiers, businesses that lose employees, drains on fathers supporting widowed daughters and grandkids, everything. Any president that does not consider the impacts on everything in his decision to go to war, and exactly what benefit we are attempting to gain, and think very seriously whether the cost is worth the benefit achieved, well he's just stupid. Will the country be better off or worse off after the war? Short term and long term. That's the question. Correct. I would not have cut fed funds more. It is not the job of the govt. to continually stimulate the economy. Paul Volker raised rates to 15% in 1982 to kill inflation, and caused the biggest recession since the depression. Inflation was a monster of a problem, it always is. Was Volker wrong to cause a recession to kill inflation? By excess stimulation, and a total inability to accept some short term mild suffering (and a good chance Bush would lose to Kerry), the govt. overstimulated and caused the housing bubble to blow up further, exacerbating the problems caused by the bursting of the bubble. Millions of home owners would not have speculated on new homes if money had been tigher. By increasing the money supply, the dollar fell precipitously, shooting up oil prices (along with 3 other major factors). Now inflation is a problem. The problems caused by overstimulation far outweigh the meager benefits seen since 04. If you think leaving fed funds at 1% was so good, please explain why. In 2001 a temporary tax cut was good to stimulate the economy. By 2005, the economy was clearly recovering, slow but it finally got there. But the deficit is huge, and it is killing the dollar. The falling dollar breeds inflation. What would you do about the deficit and inflation? I'll wait for your answer on this one. You are wrong. Carter inherited high inflation day one of his admin, built under the two prior repub admins. He had 4 years to try and deal with it. Bush in this 2007 recession inherited a balanced budget, strong dollar and low inflation, a granny pitch to hit out the park. He had 6 years for his policies to work PRIOR to putting us in this pickle. I find NO parallels between Bush in 07 and Carter in 77.
Because Congress would not have passed another across the board tax cut. When you say the rich save them you are really saying they invest it in the private economy which is a good thing. You are ignoring the fact that Bush gave a large tax cut to the middle class also. For some reason the larger dollar value tax cut for the rich (Because they pay more taxes to begin with) in your mind negates the fact that the middle class had a large tax cut too. Can't argue with you here. Short term I don't think the war has been detrimental to the economy. Remember the economy was sluggish even before the war despite tax cuts and fed cuts. I think the long term effects of the war remain to be seen. You have already stated that the recovery was the slowest since the great depression. We had the Nasdaq crash along with 9/11 which resulted in the Dow Jones taking it's largest point dive in history. It sounds like you would have been content with the sluggish economy. With the low discount rate the economy ended up growing at a moderate pace. If the rates were not cut as they were then what do you think the outcome would have been? It probably would have resulted in a recession. Which means tax revenue would have decreased and the deficit would have went even higher. There was no short term mild suffering. You already stated the recovery was the slowest since the depression! You can't have it both ways. If the fed didn't get aggressive as he did the recovery would have stalled and the suffering would have increased. If you deny that then you deny that cutting the fed funds rate doesn't stimulate the economy. The fed wasn't trying to get Bush re-elected as you say. He was trying to fight the negative effects of the Nasdaq crash and 9/11. The economy faced extraordinary times that required drastic stimulus. By applying these measures the economy became resilient considering what factors we were up against. See above. The tax cut was good and needs to be permanent. I would cut spending. Government spending is out of control and both parties can be blamed for it. I think we already see signs that inflation will moderate with oil down 20% from its peak. Also, there's signs that food prices will moderate due to abundant crops. You make it sound like Bush was handed a solid economy and he didn't have any major obstacles to overcome which is nonsense. He was handed a slowing economy that went into a recession. (We already agreed that it was not his fault.) He had 9/11 and the biggest one day point drop in Dow history to contend with. Your solution? A temporary tax cut for the middle class and leave the discount rate alone. Bush cut middle class taxes, cut upper class taxes, and Greenspan drastically cut the fed rate and because of those things we ended up with a consistent gradual improvement in the economy. The country needed those tax cuts and discount rate cuts to overcome the major obstacles that the US economy faced. No matter how we handled those obstacles there was no perfect outcome.
You are confused in your timeline of what was happening in what year, and what action I recommended in what year. Please stay up with the thread. I had no problem with lowering rates in 01-02 with the recession in 01, that Bush did not cause. I disagreed with continuing to drop rates, fed funds to 1% in 03 and 04, three years AFTER the recovery began. By 03-04, this rate cut no longer had ANYTHING to do with the NASDAQ crash because the recovery had supposedly been underway since late 01. It appears you are saying that I said we should not have cut rates in 01, which is incorrect. Cutting rates too long and too deep, when we are years into a recovery causes too great an expansion of the money supply, leading to inflation which is terrible for everyone, especially the poor and middle class. You are confused in your timeline of what was happening in what year, and what action I recommended in what year. Please stay up with the thread. I had no problem with lowering rates in 01-02 with the recession in 01, that Bush did not cause. I disagreed with continuing to drop rates, fed funds to 1% in 03 and 04, three years AFTER the recovery began. By 03-04, this rate cut no longer had ANYTHING to do with the NASDAQ crash because the recovery had supposedly been underway since late 01. It appears you are saying that I said we should not have cut rates in 01, which is incorrect. Cutting rates too long and too deep, when we are years into a recovery causes too great an expansion of the money supply, leading to inflation which is terrible for everyone, especially the poor and middle class. Explain why it was good and why it should be permanent. Has it lead to long term sustainable economic growth? Has the supply side "boost" kicked in and lead to ever expanding economic growth? Has that ever expanding economic growth lead to INCREASED tax receipts and narrowed deficits? Well, maybe it has lead to a strong dollar and stable price environment. Well, no. But go ahead and explain all the benefits of the 2001 and 2003 tax cuts and how they have helped us all so much! What would you cut, that is big enough to make a difference? I never said Bush was handed a solid economy. You made that up. I said Bush was handed a solid financial environment, a balanced budget and a strong dollar. The govt. was on a sound FISCAL footing. That is different from the economy. Stop making up things and saying that I said it. You still have it wrong about me and the interest rate cut. I disapproved of the cut in 03-04 to fed funds 1% when the recovery had been underway for 2 years. That cut did more harm than good, leading to a blowoff in housing prices, and a much harder fall than was necessary. I approved of some easing of interest rates in 01-02 which is standard in a recession and early phase recovery. If you think that all of Bush's policies have been so great, explain why we have such a huge deficit this year and for all of Bush's eight years in office, why the dollar is at an all time low against the Euro (our chief rival for world reserve currency) and why inflation has become a problem for the nation. (hint, bad luck has nothing to do with it, we are given problems and we deal with them well or poorly). How do you deal with the deficit? How do you deal with inflation? Is it the place of the govt. to stimulate in response to all economic slowdowns? If the answer is yes, explain why Paul Volker is one of the most respected fed chairmen in history even though he raised rates until the nation crumbled into a severe recession in 81? (hint: it is NOT govt. responsibility to stimulate the economy in response to economic slowdowns, if the result of said stimulation is worse in the long run, than the economic recovery benefits in the short run. All recoveries are short term, as the business cycle has not been denied).
The more likely case is that Bush LIED during the campaign about wanting to work with the dems. Bush was not just casually associated with DeLay in Washington. Bush was the leader of the repub party. If he didn't want to work with DeLay, he would have told the House repubs to elect someone else as speaker. Bush was the boss. For that reason, your assertion holds no water. You're grasping at straws trying to defend a man that just wasn't up to the job. He's been an economic and foreign policy disaster, and yet you now try to defend him on bogus arguments that don't apply to the situation. Bush did a poor job dealing with the recession that occurred at the beginning of his term, but we sustained his ineptitude because of how strong the fiscal footing of the govt. was that Clinton passed to him. Then he messed up the economy on his own after he weakened the fiscal footing of the govt. and now we have precious little fiscal reserve to risk stimulating the economy without severe side effects from the stimulation, like higher inflation, higher deficits, and a weaker dollar.
We had moderate growth in 03 and 04. (2-3%) Without the continued rate cuts what kind of growth would you have expected? Inflation has been in check throughout Bush's term except for this year. The inflation rate in 2000 was 3.38% for Clinton's last year in office. The inflation data below does not suggest the rate cuts led to too great of an expansion in the money supply in 03 and 04. Also, the moderate growth of the economy doesn't suggest an over expansion of the money supply. Inflation rate under Bush. 01 2.83% 02 1.59% 03 2.27% 04 2.68% 05 3.39% 06 3.24% 07 2.85% http://www.inflationdata.com/Inflation/Inflation_Rate/HistoricalInflation.aspx The last thing this economy needs right now is a tax increase or reversal of the Bush tax cuts. The tax cuts led to moderate economic growth. From 01 to 07 government revenue increased by 1345.5 billion! I would call that increased tax receipts. Did the deficit go down? No, because government spending is out of control. Government revenue in Billions. 2001 3756.3 2002 3509.7 2003 3671.4 2004 4140.1 2005 4495.7 2006 4438.7 2007 5101.8 http://www.usgovernmentrevenue.com/downchart_gr.php Cut the rate of increases in government spending in half across the board (including entitlements) excluding military and get rid of earmarks. Did I ever say all of Bush's policies have been great? I pointed out that his prescription drug plan was a bad idea and that he overspent in general. His tax cuts were a good idea because it led to moderate growth in challenging times and government revenue increased. Otherwise we probably would have witnessed a double dip recession. By the way the dollar is at a 3 month high against the Euro. The increased value in the dollar along with falling energy prices is a sign of good things to come. It's the government responsibility to stimulate the economy as long as inflation is in check. If it's not then there needs to be a balance between stimulating the economy and decreasing inflation.
I hope you don't actually believe the govt. stats on inflation. With gas up 300% in 8 years, college tuition going up 8% a year, healthcare up 8-10% annually. Clinton changed the way CPI was calculated to understate inflation, back in 97; I've written about it in this forum before. He enacted the biggest cut in govt. spending in history and folks don't even know it. That affected govt. retirees, and social security recipients, lowering their annual increases going forward. That will save the govt. trillions down the line. Here's another look at inflation, the one I use. <a href="http://www.shadowstats.com" border="0" title="Visit ShadowStats.com"><img src="http://shadowstats.com/imgs/sgs_cpi_home.gif" border="0" alt="Chart of U.S. Consumer Inflation (CPI)" /></a> Courtesy of "Shadow Government Statistics" (if anyone can tell me how to get this link to display, I'd appreciate it) For a view, go to http://www.shadowstats.com/ and look at the graph on the top left, "Alternate CPI Measures". The Pre Clinton, or 1980's measure of inflation shows it running at 9% currently, and not under 4% since 2002. One of the most important lessons I've learned in investing is who's lying, and why. I don't trust the govt. stats for spit. They give you a general idea for direction, but little else. They are mainly intended to keep the masses calm, if they are not bright enough to think for themselves and realize the govt. numbers are wrong.
That's fine, but you also have to live with the huge deficit, the weak dollar, and inflation that will eat away the value of anything we have saved. At annual inflation of 5%, a retiree will lose half the purchasing power of his savings in 10 years. Cutting the rate of increase is NOT cutting govt. spending. Govt. spending goes up, just not as fast. You MUST be a republican through and through. In fact, you sound JUST LIKE our politicians in Washington. Bush's tax cuts in 01 and o3 failed. That's why fed funds had to be dropped to 1%, the lowest in 40 years, at 2 years into the "supposed" recovery after the recession ended in late 01. Because the tax cuts primarily went to the rich, who did not have to spend them, they did not have the positive impact that most tax cuts usually have, since generally the poor and middle class are targeted with the tax cuts, since they must spend them to make ends meet. The dollar is enjoying a temporary correction in its 7 year bear market. No trend has been established. It could also be recognition that the Euro zone will be experiencing a slowdown also, so the other side of the trade has weakened rather than our side strenghtening. Speculators have bailed out of the oil market, as the recession and high prices have blunted demand. When you look at the speed of the price rise in 08 and the speed of the decline in July / Aug.; this is not mainly fundamentals, it is mainly speculators moving in and out of the market. Inflation is not in check. The forces of inflation were loosed in 03 and 04 with fed funds at 1%, 2 to 3 years INTO A SUPPOSED RECOVERY. That was a mistake. Now, we all pay the price. Inflation takes years of bad policy to creep into the system, and it's very hard to kill. The only way I know is a whopper recession, ala 1981 by Paul Volker. Killing it ain't pretty.
