Bush vs Kerry on Economics

[Dogwood]

A number of people have suggested, quite properly, that we should be spending less time debating the minutia between the candidates (war records, malapropisms, appearance, etc) and more time on the issues (Economics, Foreign policy, Abortion, Gay Marraige, etc). Sounds good to me.

So to get things rolling, who wants to forward an argument for the superiority of their candidates economic policy? Given all the complaining, there should be lots of people eager to jump in on this and discuss their ideas for a sound fiscal policy for the country.

 

[corplinx]

Its hard to tackle economics. On one hand you have Bush who has been trying to spend his way out of an economic downturn. On the other hand you have Kerry who has never had the opportunity to develop an economic record.

I really can't say what either of their true economic cores is.

 

[Brown]

Well, some time ago there was "Nixonomics." Remember those voluntary wage and price controls? Didn't work.

Jimmy Carter tried the kind of economic planning that they teach in college freshman economics courses. Didn't work (but college freshman economics professors continued to teach it anyway).

Then came "Reaganomics." Bush the elder, when he was not on Reagan's team, called it "Voo doo economics." Bush later recanted (so the he could become vice president), but he was basically right. Reaganomics could not, and did not, work. The national debt ballooned to unprecedented levels.

In one of the greatest mistakes of his administration, Bush the elder failed to show that he was "his own man" by setting aside Reaganomics. He then lost the 1992 election to a guy whose supporters had the unofficial slogan, "It's the economy, stupid."

Then came Clinton. Clinton talked a lot about "my plan" for the economy, and how it would reduce, possibly eliminate, deficit spending. Most people, Democrats included, thought it was BS. But damn if he didn't get the job done. It was amazing. The government actually started to run surpluses ... and these surpluses were forecast to continue for years to come!

And then little Bush took office.

With astonishing speed, the surplus disappeared in a puff of smoke, and "borrow and spend" policies returned.

So, I think I have a pretty good idea of what Bush's economic policies are, and I have an excellent idea as to how good their track record is.

As for Kerry, I don't have a clue. He says he has "a plan," just like Clinton did, and it sounds like BS, just like Clinton. But Kerry has the advantage of having Clinton available to advise him.

 

[corplinx]

Well, some time ago there was "Nixonomics." Remember those voluntary wage and price controls? Didn't work.

Jimmy Carter tried the kind of economic planning that they teach in college freshman economics courses. Didn't work (but college freshman economics professors continued to teach it anyway).

Then came "Reaganomics." Bush the elder, when he was not on Reagan's team, called it "Voo doo economics." Bush later recanted (so the he could become vice president), but he was basically right. Reaganomics could not, and did not, work. The national debt ballooned to unprecedented levels.

In one of the greatest mistakes of his administration, Bush the elder failed to show that he was "his own man" by setting aside Reaganomics. He then lost the 1992 election to a guy whose supporters had the unofficial slogan, "It's the economy, stupid."

Then came Clinton. Clinton talked a lot about "my plan" for the economy, and how it would reduce, possibly eliminate, deficit spending. Most people, Democrats included, thought it was BS. But damn if he didn't get the job done. It was amazing. The government actually started to run surpluses ... and these surpluses were forecast to continue for years to come!

And then little Bush took office.

With astonishing speed, the surplus disappeared in a puff of smoke, and "borrow and spend" policies returned.

So, I think I have a pretty good idea of what Bush's economic policies are, and I have an excellent idea as to how good their track record is.

As for Kerry, I don't have a clue. He says he has "a plan," just like Clinton did, and it sounds like BS, just like Clinton. But Kerry has the advantage of having Clinton available to advise him.

Do you actually believe the malarkey you just posted?

I was with you right up until you gave Clinton credit for the surpluses.

Clinton's economic plan was simple. He had a handsoff one (which is good).

Then came the 94 turnover and chairman Newt reduced the average growth of government spending to a lower level. This single modest change wasn't what created surpluses either.

What created surpluses was the private sector outgrowing government basically. We had good tech growth in the mid nineties which rippled into other sectors and the bubble in the late nineties. Tax revenues grew really well in this period. If you remember, the budget balanced _years earlier_ than chairnman Newt predicted because the bubble growth wasn't on the radar.

If you remember, Clinton had to be dragged kicking and screaming into reducing the rates at which government grew. If anything, the budget balanced _in spite_ of him.

If I had to chalk up surpluses to any one thing, I would say they were due to "irrational exuberance" as Mister Greenspan called it.

If you remember, when that exuberance died in 1999 and the bubble crashed, so did they.

Maybe as time passes your partisan way of looking at this time period will change. Recent events are often the ones most subject to personal filters.

 

[Ed]

And then little Bush took office.

With astonishing speed, the surplus disappeared in a puff of smoke, and "borrow and spend" policies returned.

So, I think I have a pretty good idea of what Bush's economic policies are, and I have an excellent idea as to how good their track record is.

As for Kerry, I don't have a clue. He says he has "a plan," just like Clinton did, and it sounds like BS, just like Clinton. But Kerry has the advantage of having Clinton available to advise him.

This is hardly fair. Stock values were obscenely inflated and we had the dot bomb meltdown. Then we had a little thing called 9/11. There was no way the market was going to go on the way it was. Wise investment analysts (those with balls at least) were advising investors to hunker down. To blame Bush is pure biased political shallow rhetoric and is exactly what is precluding intelligent discussion of the issues.

 

[Silicon]

And about a million economists were councilling against huge tax cuts in the meanwhile.

But they went ahead anyway.

 

[RandFan]

Well, some time ago there was "Nixonomics." Remember those voluntary wage and price controls? Didn't work.

Jimmy Carter tried the kind of economic planning that they teach in college freshman economics courses. Didn't work (but college freshman economics professors continued to teach it anyway).

Then came "Reaganomics." Bush the elder, when he was not on Reagan's team, called it "Voo doo economics." Bush later recanted (so the he could become vice president), but he was basically right. Reaganomics could not, and did not, work. The national debt ballooned to unprecedented levels.

In one of the greatest mistakes of his administration, Bush the elder failed to show that he was "his own man" by setting aside Reaganomics. He then lost the 1992 election to a guy whose supporters had the unofficial slogan, "It's the economy, stupid."

Then came Clinton. Clinton talked a lot about "my plan" for the economy, and how it would reduce, possibly eliminate, deficit spending. Most people, Democrats included, thought it was BS. But damn if he didn't get the job done. It was amazing. The government actually started to run surpluses ... and these surpluses were forecast to continue for years to come!

And then little Bush took office.

With astonishing speed, the surplus disappeared in a puff of smoke, and "borrow and spend" policies returned.

So, I think I have a pretty good idea of what Bush's economic policies are, and I have an excellent idea as to how good their track record is.

As for Kerry, I don't have a clue. He says he has "a plan," just like Clinton did, and it sounds like BS, just like Clinton. But Kerry has the advantage of having Clinton available to advise him.

From a purely political POV I agree. From an objective POV your analysis is overly simplistic and to a degree wrong. I'm not an economist but I know enough to understand that our economy is very complex and that it is affected by variables that by and large are far beyond the control of the President. It is true according to many economists that tinkering with the dynamics like Nixon and Carter did can have unintended consequences. It's also true that deficits ballooned during Reagan but then tax revenue also increased dramatically. Sadly spending increased faster than the rate of increase for revenue. Reagan did not control congress and had to make concessions to get his tax cuts.

Economies don't really respond within months of a president taking office. The truth is that the economy was on the upswing a year before Clinton took office and was on a downward trend a year before he left. In fact the over all picture shows a long expansion since Reagan with a small correction during Bush Sr.

Clinton enjoyed an unusually long economic plus cycle due in part to emerging new technologies and false beliefs in a "new economy". This caused investors to pump money into false hopes. The market was way over valued and in need of a large correction. Further and as has been pointed out already the Republican's took control of congress and put our nation in a different direction economically.

Bush took control of an economy that was already in a down turn and correcting for the over valued market it was during this downturn that we were attacked. This was a significant blow to our economy that caused significant damage to our airline industry and caused panic in an already jittery marketplace.

Still, I think you have to give Clinton credit. I think he did a good job and I think Bush deserves some blame. I think he has overspent. Politics is fine and this is the political forum so it is appropriate to engage in politics here but I think it would be ok to apply a little bit of objectivity to the discussion.

 

[Silicon]

I agree 100% with Randfan.


Too much credit being passed around, AND too much blame.

 

[Drifterman]

Well, we can see how the prez carefully studied the changing economic climate before and during his tenure, and modified his economic policies to best promote national prosperity in view of the radically changing economic climate.

During the campaign for the election in 2000 there were serious worries that the government was running an unreasonable large budget surplus. The Bush team, somewhat reasonably proposed that a significant tax cut would be a fair way to return this money to the American consumer.

When, by 2001, it was obvious that the predicted surpluses were not going to materialise as anticipated, the same tax cuts were proposed as a means to help the economy to quickly rebound out of recession, in accordance with demand-side theory, by giving Americans more money to spend.

However, the rationale for later tax cuts was rather different - by 2003 it would seem that, despite their failure to stimulate short-term growth and job creation, the tax cutes would, in true supply-side style, lead to long-term growth.

So we can see that, contrary to the theory that a government should be responsive to the changing economic climate and tailor its policies to responsibly offset that climate in a way that is favorable to both business and consumer, the Bush team had a policy that they wished to push no matter what the economic circumstances were.

Rather like a quack physician selling his own brand of snake-oil, the Bush economic team have prescribed exactly the same medicine (i.e. the one that most financially benefits themselves and their core source of funding), for three completely different maladies.

This fact alone makes me deeply suspicious of the motives behind the Bush team's economic policies - their justifcations resemble pseudo-science in a way that triggers my bullsh*t detector.

An honest appraisal would probably conclude that the tax-cuts were a result of a 'Starve the beast' philosophy (a defensible concept), but one that has been followed through stealth and flim-flammery rather than an honest and up-front admission.

This Paul Krugman essay puts the whole thing into perspective rather better than my words here.

 

[Michael Redman]

If you remember, Clinton had to be dragged kicking and screaming into reducing the rates at which government grew. If anything, the budget balanced _in spite_ of him.

Well, that's certainly not at all true. Clinton and Gore made the only credibly attept to control the size of government we have seen in recent administrations. They proposed smaller budget each year than Congress eventually adopted, something Reagan/Bush never did. Still, I agree that it's a little silly to hold the president to prevailing economic conditions. Clinton wasn't responsible for the tech bubble, and Bush isn't responsible for it's collapse.

With both candidates throwing out economic plans that see the deficit increasing for the foreseeable future, I don't believe either of them has a plan that does anything other than win votes with sound bites with at the expense of our long term economic viability.

 

[Drifterman]

With both candidates throwing out economic plans that see the deficit increasing for the foreseeable future, I don't believe either of them has a plan that does anything other than win votes with sound bites with at the expense of our long term economic viability.

It depends what the deficit spending is being spent on.

1) If it is defence spending, that is a big problem - since a significant proportion of defence spending is essentially pork-barrel. The American tax-payer of the future is being squeezed for no good reason.

Investment in weapons systems is a horribly inefficient way to spent tax-dollars if you are looking to benefit the economy as a whole.

2) If it is investment in education, healthcare or infrastructure, then this is a much better way to spend a deficit, since you are either investing in human capital for the future, providing a service, or investing in hardware that itself could (and should) benefit the economy.

Summary: We should therefore examine the candidates policies so we can see precisely where the deficit spending is going to go.

All deficits are not made equal.

 

[RandFan]

It depends what the deficit spending is being spent on.

1) If it is defence spending, that is a big problem - since a significant proportion of defence spending is essentially pork-barrel. The American tax-payer of the future is being squeezed for no good reason.

Oh, so this is where ALL the pork barrel spending is.

Investment in weapons systems is a horribly inefficient way to spent tax-dollars if you are looking to benefit the economy as a whole.

I don't know of anyone who is suggesting that we spend money on defense to benefit the economy. Do you? We should spend money on defense for that very reason, defense. Cutting defense spending simply because there is a deficit is not exactly prudent if you believe that defense is important to the nation. We should spend what is necessary to defend the nation. However we should heed Eisenhower advice and be wary of the military industrial complex.

2) If it is investment in education, healthcare or infrastructure, then this is a much better way to spend a deficit, since you are either investing in human capital for the future, providing a service, or investing in hardware that itself could (and should) benefit the economy.

Ahhh.... the pure and unadulterated forms of spending. No pork barrel here. Load up senators and feel good to know that you are investing in our future.

Don't get me wrong. I understand your point. But money can be wasted on these programs as easily as it can any other. There is no guarantee that there will even be a return on investment. Throwing money at a problem doesn't always solve the problem.

Summary: We should therefore examine the candidates policies so we can see precisely where the deficit spending is going to go.

All deficits are not made equal.

Hopefully we are not so short sighted as to put defense spending in one column and social spending in another and simply tally the columns.

 

[Snide]

I agree 100% with Randfan.


Too much credit being passed around, AND too much blame.

I agree with you 100% about agreeing with Randfan.

Also, to Corplinx, "kicking and screeming" is quite a bit harsh and not very accurate as a metaphor, to say the least.

 

[Drifterman]

Oh, so this is where ALL the pork barrel spending is.

I'm going to hold my tongue from mentioning "strawman", since this comment doesn't quite qualify as yet, although it does, IMHO, suggest an attempt at trying to prejudice the argument away from a sober comparison of the value of the competing forms of deficit spending, into a "You don't want to protect America from the evildoers" tit-for-tat session.

Sorry, not interested in one of those, so I'm not going to rise to the bait.

I don't know of anyone who is suggesting that we spend money on defense to benefit the economy. Do you? We should spend money on defense for that very reason, defense. Cutting defense spending simply because there is a deficit is not exactly prudent if you believe that defense is important to the nation. We should spend what is necessary to defend the nation.

And no more.

However we should heed Eisenhower advice and be wary of the military industrial complex.

And also to keep a careful eye on the Medical Insurance and Ambulance Chaser complex. I agree that there is plenty of pork if you know where to look for it. Let's look for ways to bring value for money back to the American taxpayer.

Ahhh.... the pure and unadulterated forms of spending. No pork barrel here. Load up senators and feel good to know that you are investing in our future.

Well, we can compare magical mystery alternative therapy funding on the medical side and magical mystery super space shields on the other for which is the bigger waste of money. I suspect the latter - but everyone wants a slice of the pork, so lets blame the piglets along with the fat old hogs.

Don't get me wrong. I understand your point. But money can be wasted on these programs as easily as it can any other. There is no guarantee that there will even be a return on investment. Throwing money at a problem doesn't always solve the problem.

Which was not suggested.

What was suggested was a sober analysis of the competing policies, with no endorsement of either candidate as yet.

Hopefully we are not so short sighted as to put defense spending in one column and social spending in another and simply tally the columns.

Which was also not suggested. I'm glad that you agree with me here.

 

[RandFan]

I'm going to hold my tongue from mentioning "strawman", since this comment doesn't quite qualify as yet, although it does, IMHO, suggest an attempt at trying to prejudice the argument away from a sober comparison of the value of the competing forms of deficit spending, into a "You don't want to protect America from the evildoers" tit-for-tat session.

Sorry, not interested in one of those, so I'm not going to rise to the bait.

And no more.

And also to keep a careful eye on the Medical Insurance and Ambulance Chaser complex. I agree that there is plenty of pork if you know where to look for it. Let's look for ways to bring value for money back to the American taxpayer.

Well, we can compare magical mystery alternative therapy funding on the medical side and magical mystery super space shields on the other for which is the bigger waste of money. I suspect the latter - but everyone wants a slice of the pork, so lets blame the piglets along with the fat old hogs.

Which was not suggested.

What was suggested was a sober analysis of the competing policies, with no endorsement of either candidate as yet.

Which was also not suggested. I'm glad that you agree with me here.

Good post. I'll leave it as is.

 

[Drifterman]

Good post. I'll leave it as is.

Thanks

One thing that might clarify my worry over defence spending as compared with other money-pits is transparency.

Since defence and national security are by their very nature *secretive* endeavours, they are not open to the same amount of public scrutiny, no matter how much we would wish to exert our need for freedom of information.

We can see that there is something seriously awry with the healthcare system because the public records show that the cost of of our healthcare is twice (IIRC) that which the Canadians pay.

Seeing the waste galvanizes us to call for change, and demand our value for money.

 

[Ed]

And about a million economists were councilling against huge tax cuts in the meanwhile.

But they went ahead anyway.

Really? So you suggest that if their advice were followed all would be well?

 

[aerocontrols]

Mr. Kerry and Trade

FOUR YEARS AGO, Sen. Robert C. Byrd (D-W.Va.) achieved a sublime fusion of bad policy and bad process. He took an obnoxious trade measure, which had been pushed by protectionists for years but had always failed on the merits, and stuffed it into an agricultural spending bill that had already passed through the Senate and would therefore escape discussion. The resulting Byrd amendment was denounced by responsible figures from both parties. Delaware Sen. William V. Roth Jr., the moderate Republican chairman of the committee with jurisdiction over trade, protested Mr. Byrd's subversion of the legislative process. President Bill Clinton called on Congress to undo its mischief.

This week, however, Sen. John F. Kerry issued a statement defending Mr. Byrd's provision. Responding to the news that the World Trade Organization had given trading partners permission to retaliate against the Byrd amendment because it is inconsistent with U.S. treaty commitments, Mr. Kerry let out a unilateralist harrumph. "Once again the Bush administration failed to stand up for American companies and workers at the WTO, and as a result, unfair trade practices are hurting our economy and middle-class families."

By its own tally, the Bush administration has won 14 of 24 cases at the WTO, a slightly higher success rate than was achieved by the Clinton administration. It did not win the Byrd case for the good reason that it did not deserve to....

 

[shanek]

Then came Clinton. Clinton talked a lot about "my plan" for the economy, and how it would reduce, possibly eliminate, deficit spending. Most people, Democrats included, thought it was BS. But damn if he didn't get the job done. It was amazing. The government actually started to run surpluses ... and these surpluses were forecast to continue for years to come!

You are aware, aren't you, that they only obtained these "surpluses" by pilfering funds from Social Security, and that the debt actually rose by about $80 billion in the "surplus" years?

 

[corplinx]

Well, that's certainly not at all true. Clinton and Gore made the only credibly attept to control the size of government we have seen in recent administrations.

I will agree with you part of the way here. The two years before the GOP took the house, they did propose cutting military and intelligence spending. These were real cuts too, not sissy GOP rate reductions. So technically they did attempt to control the "size" of government.

However, we didn't get into slowing the overall growth of programs until the chairnman newt era where we went from 10-5 percent growth for many programs down to more sensible 3-5. They didn't try to control the size of government, just the rate of increase of its funding.

All in all, closing of unnecessary bases and reducing growth rates did not do as much to balance the budget as the innovation of american companies.