Why does Bill Clinton's economic record help Obama?

[Jim in CT]

So Bill Clinton will be at the convention this week. One thing he'll do (one of the major things he'll do) is remind Americans that the economy did great when he was President, which is true. Clinton and Obama will therefore suggest that the economic principles supported by Democrats are effective.

But here's what I don't get...

Yes, Clinton did a spectacular job at improvng the economy. But what did he do, exactly? Did he do the same things that Obama is proposing?

Hell, no.

Clinton slashed tax rates. Clinton slashed spending. Clinton had a balanced budget several years in a row. Clinton enacted very tough welfare reform, telling millions of free-loaders to get back to work.

In a rational world, in a world with a shred of intellectual honesty, if Bill Clinton thinks his policies are what is needed to turn things around, he should be campaigning for Ryan/Romney. Because the Romney/Ryan ticket supports the policies that Clinton enacted. Obama wants to do the opposite of what Clinton did.

When it comes to economics, Clinton looked a lot more like a Tea Partier than he looks like Barack Obama.

And guess what? It worked!

[justplugit]

Is this the same Bill Clinton that was reported in the Washinton Post
as having recently said:

"we are still in a recession", " we should extend the Bush Tax Cuts for the wealthy",
and "Romney had a Sterling career?

Couldn't be, must be a different guy.

[RIJIMMY]

Clinton's success was fueled by the dot-com revolution and subsequent bubble.

[Jim in CT]

Originally Posted by RIJIMMY

Clinton's success was fueled by the dot-com revolution and subsequent bubble.

True, and the economic growth during the first 7+ years of Bush's presidency was fueled by the real estate bubble...

But my question, I believe, is still valid. When Clinton's economy looked horrible, he lowered tax rates significantly, cut spending, balanced the budget, and reformed welfare. That's what Clinton thought was the right path to grow the economy.

So what's the connection between Clinton's economic policies, and those of Obama, other than the fact that they both are Democrats? If you put that aside, weren't Clintons' economic policies more like those of Romney/Ryan, than those of Obama/Biden?

During his 1996 State of the Union address, Clinton famously said "the era of big government is over".

I'm just not seeing the logic behind Clinton saying "hey, if you liked what the economy did when I was President, then vote for Obama".

[spence]

Originally Posted by Jim in CT

But my question, I believe, is still valid. When Clinton's economy looked horrible, he lowered tax rates significantly, cut spending, balanced the budget, and reformed welfare. That's what Clinton thought was the right path to grow the economy."

Jim, please...get your head out of the rubber cement barrel.

Clinton came to office and raised taxes...a lot.

Later when the economy was moving he did cut some, but not significantly. Much of the cost reduction was due to a rapid decline in defense spending, more slowly rising health care costs and an lack of focus on things like infrastructure.

As Jimmy rightly indicated, the Clinton economy was driven by high tech...actually, it was when the Clinton tax increases were kicking in that the economy took off...go figure.

Welfare reform was one area where Clinton did capitulate to the GOP and he should take credit for it. But it's not like he was the driving force...

The lesson being, this stuff isn't all simple cause and effect.

-spence

[Jim in CT]

Originally Posted by spence

Jim, please...get your head out of the rubber cement barrel.

Clinton came to office and raised taxes...a lot.

Later when the economy was moving he did cut some, but not significantly. Much of this was due to a rapid decline in defense spending, more slowly rising health care costs and an lack of focus on things like infrastructure.

As Jimmy rightly indicated, the Clinton economy was driven by high tech...actually, it was when the Clinton tax increases were kicking in that the economy took off...go figure.

Welfare reform was one area where Clinton did capitulate to the GOP and he should take credit for it. But it's not like he was the driving force...

The lesson being, this stuff isn't all simple cause and effect.

-spence

"Jim, please...get your head out of the rubber cement barrel."

For someone who denies that Michelle Obama claimed that she wasn't proud of the USA until 2008, you seem pretty confident in your grasp of things.

"Clinton came to office and raised taxes...a lot."

Clinton increased taxes in 1993, and decreased taxes in 1997.

"he did cut some, but not significantly"

I couldn't find anything on effective tax rates before and after...but Clinton cut the maximum capital gains tax rate from 28% to 20%. That's significant by any measure.

"actually, it was when the Clinton tax increases were kicking in that the economy took off...go figure."

Spence, Clinton increased taxes, then decreased taxes, and then the econjomy started growing. Yet you won't consider the possibility that the tax cut had anything to do with it.

OK, so using yuor logic, can't I say that it was when the Bush tax cuts kicked in, that the economy took off, even more? Go figure?

"The lesson being, this stuff isn't all simple cause and effect."

But you just said, that when the Clinton tax hikes went into effect, the economy took off, "go figure"? So aren't you assuming cause-and-effect there?

Spence, I agree the math isn't simple. But it seems like when Clinton tax hikes are followed by economic growth, you assume simple causality (and you ignore completely the subsequent tax cuts he implemented). But when Bush tax cuts are followed by economic growth, all of a sudden "it's not that simple".

"Much of this was due to a rapid decline in defense spending, more slowly rising health care costs and an lack of focus on things like infrastructure"

Spence, the man cut spending, and balanced the budget. How does that jive with our current President who operates with trillion dollar deficits every year?

[spence]

Originally Posted by Jim in CT

Spence, Clinton increased taxes, then decreased taxes, and then the econjomy started growing. Yet you won't consider the possibility that the tax cut had anything to do with it.

OK, so using yuor logic, can't I say that it was when the Bush tax cuts kicked in, that the economy took off, even more? Go figure?

The dot com growth in the markets really started climbing in 1995, after Clinton raised taxes and before he cut them.

The point is that tax policy is just one factor in economic performance. Tax cuts for the middle class may reduce household debt and keep demand higher. But I don't see any evidence that suggests it has a large bearing short-term given the mechanics of trickle down.

Spence, the man cut spending, and balanced the budget. How does that jive with our current President who operates with trillion dollar deficits every year?

Clinton inherited a relatively peaceful world, oil under 20 dollars, an economy already out of a recession and the most significant technology advancement to hit an emerging global market since perhaps in the past century.

Obama by contrast inherited two wars, the worst economic mess since the great depression, multiple disintegrating nation states, a failing EU, a trillion dollar deficit (yes, he inherited this) and a nation saddled with debt and trending towards more.

He should be able to just snap his fingers and fix it all...right?

-spence

[Piscator]

Originally Posted by spence

Tax cuts for the middle class may reduce household debt and keep demand higher.

What classifies middle class? I still don't know what that answer is. With all of the tax rules and AMT it seems like some of the true middle class with families are being treated as rich.............

[Jim in CT]

Originally Posted by spence

He should be able to just snap his fingers and fix it all...right?

-spence

Not snap his fingers and fix it, no...but spending 9 or so trillion in one term, can't be dismissed as cavalierly describing it as "snapping your fingers". The man spent some considerable resources over 3.5 years. It didn't work. Work another agenda have worked? I can't say. But this policy ain't working.

[spence]

Originally Posted by Piscator

What classifies middle class? I still don't know what that answer is. With all of the tax rules and AMT it seems like some of the true middle class with families are being treated as rich.............

This is a good question. I think on average for a family of 4 it's around 80-90K. Certainly this would vary by location...

-spence