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The Myth of the Clinton Surplus - An oldie but a goodie

Discussion in 'Economics, Business, and Taxes' started by resident_evil, Aug 24, 2013.

  1. resident_evil

    resident_evil Senator

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    I believe this is some great insight into our financial travails going back to the roots. Something many people need to know when commenting on today's fiscal issues:

    http://www.craigsteiner.us/articles/16

    http://www.craigsteiner.us/articles/16
     
    Last edited: Aug 24, 2013
  2. Jen

    Jen meh

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    It's a good thing Newt and the Republicans got hold of the House or Clinton wouldn't have looked so good.

    I do think that the Democrats learned from that though. By the time Pelosi got to be Speaker of the House in 2007, she knew she had to work fast to make sure Bush looked terrible by the time the 2008 election came around. She succeeded.
     
  3. Wahbooz

    Wahbooz Governor

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    And did Steiner break down how much of the national debt was held by investors, financial institutions, private citizens in the form of Treasury bonds and savings bonds, the Social Security system, and did he show how much of the deficit was actually interest on bonds, or the cost of retired bonds. Why didn't we retire "all the debt possible" back in 2001, when Bush told congress he wanted to? No, we'd rather give a tax break.

    Perhaps we should retire all the debt, and take that investment away from wealthy investors.
     
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  4. Arkady

    Arkady President

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    This has been refuted so many times, but in the zombie world of conservative ideology, that doesn't matter. Kill an idea a thousand times and it will keep coming back. It doesn't matter how obvious the flaw in the argument is (obviously, debt can rise even in a year with a surplus); all that matters is if the talking point if ideologically convenient.
     
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  5. resident_evil

    resident_evil Senator

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    I can't believe you said that with a straight face. lol
     
  6. Mytzlplk

    Mytzlplk Governor

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  7. Arkady

    Arkady President

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    As you should probably know, the deficit was falling dramatically under Clinton before Republicans took Congress. And, as you should also know, we went from record surpluses the record deficits with Republicans still in control of Congress, in the early Bush years. Trying to explain fiscal improvement that ran from 1993 through 2000 by referencing Republican Congressional control that ran from 1995 through 2006 is the kind of thing that only makes sense if you spent that whole era letting Fox News whisper sweet absurdities in your ear.

    That's especially obvious if you dig into the budgets. Three key ingredients took us from deficits to surpluses: strong, sustained economic growth, a higher effective tax rate, and falling defense spending. Yes, we saved some money by cutting minor social spending programs. But mostly it was about the three things I mentioned. When we went back to robust military spending growth and when tax rates were slashed, up under Bush, record deficits returned. Surely, at some level, you're aware of that history.
     
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  8. Arkady

    Arkady President

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    Your ignorance of finance is amusing. Ask ANYONE who has ever managed a business or even a personal budget whether a surplus automatically means falling debt.

    Let say, for example, you're getting a 10% return on investments and can borrow at 5%. If you're running a surplus, will you necessarily use it to pay down debt, instead of expanding investment?
     
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  9. resident_evil

    resident_evil Senator

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    We aren't talking finance, we are debating propaganda. And maybe your question explains exactly why the left doesn't get the Tea Party.
     
  10. Yuri Zhivago

    Yuri Zhivago Mayor

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    left?
    There is not a real human on this planet who gets bacterial mindset of tea party microbe-like neuron functioning in clueless ignorant members' extensions of the neck
     
  11. resident_evil

    resident_evil Senator

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    So this economic miracle was manufactured in a two year period, by a Democrat president and congress, that somehow survived the Gingrich years (your relatively balanced view also makes no allowance for the peace dividend earned even earlier in the timeline)?

    The facts remain that government never did its job to secure our future. The years of "surplus" were government manufactured propaganda. We were defrauded by the left and the right.

    AND SOMEONE IS GOING TO HAVE TO EXPLAIN KEYNESIAN ECONOMICS TO ME-

    How did we ever enter into a grand recession when government (under Bush) was spending money hand over fist before the crash. You'd think that all these countries around the world would be flush with cash given how their whole fiscal history is of year on year Keynesian economics. Spend, spend, spend.
     
    Last edited: Aug 25, 2013
  12. middleview

    middleview President Supporting Member

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    The recession began, according to the National Bureau of Economic Research, is defined as following two consecutive quarters of negative growth. Since the official start to the recession was December of 2007, that would put the beginning of the decline sometime in August of 2007. What, exactly, did the democrats do from January of 2007 to August that caused mortgages to begin to default? One real sign of the start of the crisis was when BNP Paribas, due to a liquidity crunch, stopped all withdrawals from some hedge funds. That was on August 7,2007.

    What did Bush do to contribute to the downturn?
    1. The republicans wrote the Gramm-Leach-Bliley act (which Clinton signed), but even as it became obvious in 2004 that it was a problem, the repubs did nothing at all to fix it.
    2. In 2003 the republicans passed the "America Dreams Act" which gave federal guarantees to $0 down mortgages (for the first time). Gee, what could go wrong there?
    3. Also in 2003 the Bush administration changed the liquidity rules for banks. Now they could borrow as much as $45 for every $1 of deposits. That would mean that if their investments (which they were putting the borrowed money into) were to drop just 3% the bank would be insolvent. Quite literally they owed more than they were worth. Since they were investing in mortgage back securities, the drop in home prices did them in.
    4. Since the problem was related to mortgage backed securities it is vitally important to note that the republican legislation did not allow federal oversight of those securities and again, Bush did nothing to fix that.
    5. The head of the SEC was so convinced of the republican mantra of free markets and no government regulation...he transferred or fired 150 people from enforcements and investigations. He left just one person in the office of National Risk Assessment. AIG had just one auditor from the Office of Thrift Supervision for their global business.

    Bush looked terrible all on his own.
     
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  13. resident_evil

    resident_evil Senator

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    And I put forth for your careful consideration the following words of the left's comprehension skills.

    Q.E.D.
     
  14. Mytzlplk

    Mytzlplk Governor

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    indeed, and it's not coincidental that there is so much crossover on things like AGW, where their stupidity is the common/shared element.

    It's always been the most common denominator where cons are concerned period.
     
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  15. resident_evil

    resident_evil Senator

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    I've met as many 'stupid' liberals as I have met 'stupid' conservatives. The only thing worse is those who assert themselves smarter.

    "Conservatives are not necessarily stupid, but most stupid people are conservative."
    -John Stuart Mill, 1806-1873, British philosopher

    It's more like...

    “If you're not a liberal at twenty you have no heart, if you're not a conservative at forty you have no brain.”

    ~W. Churchill
     
  16. middleview

    middleview President Supporting Member

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    I guess you're now giving credit for the tax increase to the republicans?
     
  17. middleview

    middleview President Supporting Member

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    Neither quote actually describes how idiotic someone has to be to be a republican at this point.
     
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  18. resident_evil

    resident_evil Senator

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    I'd respond but I don't know what to say. At least you know I read your post.
     
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  19. resident_evil

    resident_evil Senator

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    And Clinton's last budget proposal for FY2001, which ended in September 2001, generated a $133.29 billion deficit. The growing deficits started in the year of the last Clinton budget, not in the first year of the Bush administration.

    http://www.craigsteiner.us/articles/16
     
  20. middleview

    middleview President Supporting Member

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    I was a republican from 1974 to 2004. I campaigned for Perot in 1992 because republican dishonesty about the tax cuts (the rosey scenario) and spending pissed me off. In 1996 I voted for Clinton because things were working. I campaigned for McCain in 2000 and saw the remarkable lack of values in the Bush/Rove campaign and the takeover by the "moral' majority and the Christian fundamentalist crowd. The party stands for nothing at all.

    I'm a fiscal conservative, but recognize that it is good business to stabilize the economy. We can't expect to recover if millions of people leave the economy because they have run out of money, depleted their savings, lost their homes....We cannot have a healthy economy with the kind of focus on tax cuts while ignoring the exploding payments for interest on the debt. We cannot ignore the worst excesses of the tax code allowing the wealthy or business to hide income overseas or even rewarding them for investments in other countries. That is what I see the republican party doing so as to garner financial support from those interests.

    A couple of examples. Wendy Gramm, former chair of the CFTC, changed the rules for energy future trading just as she left office in 1993. She then became chair of the audit committee as a member of the board at Enron.....it seems the changes she made pretty much were exactly what Enron wanted....and she was rewarded for the work. Later her husband, Phil Gramm, as senator from Texas, put his name on a bill written to repeal Glass-Steagal. Then he left office to take a job as a senior VP at UBS. You tell me. How do two former economics professors become millionaires based on government "service". They embody what the republican party has become. Influence for sale. They may not be cheap, but they can be had.
     

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