An elected California office holder and Republican party official opined on the progressive Dave Ross radio talk-show in Seattle that wise small-business owners making sound business decisions caused the spectacular growth under Clinton, not the President's policies. Why those same small-business owners couldn't, or didn't, make sound business decisions during Reagan's huge recession or Bush the Daddy's recession is a mystery that was left untouched. In a column in the Seattle Post-Intelligencer, a former official of the previous GOP administration was quoted as saying that Clinton's proposed tax increases would destroy the economy and plunge the nation back into the recession it was just beginning to crawl out of.
And Republicans claimed (in another article in the P-I by former Ohio GOP representative John Kasich) that it was a GOP Congress that created the Clinton economic expansion, especially the reduction in the annual deficits that eventually turned into surpluses, by "holding his feet to the fire" on budgets, even though every Republican in Congress had voted against his first budget that began the downward spiral of deficit spending. The Seattle P-I refused to publish as much as a letter to the editor proving those arguments wrong, even though the P-I is a slightly liberal newspaper, much more progressive than the reactionary Seattle Times.
To recap. Clinton inherited a $290-billion deficit from Bush the Daddy which was reduced to $255 billion the first year and then to $203 billion in the second year, the very budget every GOP member of Congress voted against, and which former Rep. Dick Armey (R-TX) called a "big-government boondoggle" that "will never work." (Armey was an economics professor who didn't merit tenure and who whole-heartedly supported the tax cuts that now threaten the nation's well-being.) Clinton's budget in the next term of Congress again reduced the deficit by billions, down to $107 billion in fiscal 1996 after being $164 the previous year. In July of 1997 the GOP Congress saw the direction things were going and joined the parade to finally adopt a bill designed to balance the budget by 2002, then turned around and claimed credit for everything when the budget was balanced years earlier than hoped.
When Bush the Infantile came into office with annual economic growth slowing to below the 2 percent range, after being close to 8 percent for short periods in the middle of Clinton's growth period, he engineered more tax cuts through the Republican Congress, and the nation slipped into recession (apparently those wise small-business owners stopped making sound business decisions again) when additional spending on the nation's infrastructure to prevent bridge collapses or sewer explosions might have staved off the recession. Tax cuts do nothing for the economy when those who got the cuts just turn around and buy Treasury bills, bonds and notes with the money saved.
And with the certainty that the sun rises in the east, the right changed its spots again to claim anew that the President has no control of the economy. Like all recessions, the end came, sort of, and slow-and-modest growth occurred as the economy struggled to recover in 2003. Bush has maintained since then, and his supporters concur, that the President indeed controls the economy and the huge tax cuts for America's aristocracy were the reason for the economy growing. Of course, always ignored was the huge borrowing the right did, and when the borrowed dollars were placed in the economy, the right claimed the additional dollars as growth; an asset not a debit. In short; Enron business practices.
The business cycle does, in deed, drive the growth or retraction of the economy without any political input. But, what a president and Congress do will impact how far in either direction the cycle goes. When the economy drifts toward recession, Republicans always do the wrong thing and the drift continues into recession. That is why every Republican administration since World War II has ruled over a recession (Nixon had two and Infantile is working toward his second) after giving us the Great Depression before the war. Democratic administrations tend to do the correct thing because they have stayed recession-free, save for the one under Carter which was the shortest and mildest of them all and was caused more by oil boycotts by OPEC than by policy.
The right ought to pick a philosophy ~ the President does or does not influence the economy ~ and stick to it.
To combat our economic problems, libertarian Texas GOP Rep. Ron Paul, who ran for president partly on economic issues, propossed elimination of the federal income tax and to reintroduce the Constitution as applied in the 18th Century. That would be foolhardy as will be shown by examining tax collections in the 18th and 19th centuries.
Until the 20th Century, taxes were collected from duties, imposts and excises and a tax the federal government imposed on the states according to their populations. The feds taxed the states and the states taxed individuals any way they could.
If done today, using figures available just prior to Bush the Infantile taking office and screwing up the nation, we would get a scary picture for some.
The tax burden today would be about $10,000 for each man, woman and child just to fund the budget Bush the Infantile recently submitted to Congress. Under the original system taxes not collected through duties, imposts and excises would have to come directly from individuals or businesses the states would tax. Connecticut with a population of 3.275 million almost mirrors Oklahoma with a population of 3.3 million (population figures from the 2000 census weren't available when Infantile took over). Both states would pay approximately $33 billion dollars in all forms of taxes to the federal government, but Connecticut's per capita income of $33,190 dwarfs Oklahoma's per capita income of $19,350.
The cheese-nibbling, wine-sipping gentile folk of Connecticut would get a tax break because they could easily pay ~ possibly pay much less than now ~ for taxes. Our beer-guzzling dust-kicking Okies would get screwed, required to pay much more than they now pay. Good ole boys from Mississippi would be worse off, the worst of any state in America, with a per capita income of $17,475. In fact, most Southern states had per capita incomes below $20,000 while most non-Southern states had incomes well above $20,000, many in the mid-$25K or above with New Jersey at $31K and the District of Columbia at $34K.
The federal income tax instituted in 1913 actually benefits residents of the low-income states of the South because it prevents their people from paying a higher percentage of income in taxes than do the well-to-do states.
It is strange that the people who call for reverting to the method of taxation of early America are the ones who would be hurt the most. Connecticut's per capita income was 50 percent higher than the income of Paul's fellow Texans, but Texans keep returning him to Congress to argue against their well-being.
Paul and his minions think their ideas can save American. They are mad fools.
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