Posted on 08/11/2004 5:26:32 AM PDT by OESY
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During recent years, this has not always been the case. Business investment has been on a roller coaster. After growing at a 14.5% annualized rate in the first-half of 2000, business fixed investment stopped in its tracks and grew just 1% in the second-half.
The Clinton White House knew this was happening. A member of President Clinton's Council of Economic Advisors (CEA), Kathryn Shaw, said in August 2001, "economic growth had started to fade in the fall of 2000." Mr. Clinton's CEA chairman, Joseph Stiglitz, wrote in 2002 that "the economy was slipping into recession even before Bush took office." Al Gore said that "the economic downturn really began in March of 2000."
Taxes and Fed policy share the blame for bringing the economy down. Because tax brackets are indexed to inflation, but not real income growth, many millions of taxpayers ended up paying higher tax rates in the 1990s. Productivity-driven increases in wages, salaries and investment returns pushed taxpayers into higher tax brackets. This stealth tax hike reduced the after-tax incentives to take investment risk. At the same time, excessive Fed rate hikes in 1999 and 2000 created deflationary pressures, which also undermined the willingness of entrepreneurs to take risks.
Starting in January 2001, business fixed investment fell by 15% over nine consecutive quarters -- the longest period of declining investment on record.
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Once the second Bush tax cut was passed, in May 2003, business investment immediately improved. The cuts in marginal tax rates returned tax burdens to early Clinton-era levels. In addition, reductions in capital gain and dividend tax rates encouraged entrepreneurial activity by providing greater after-tax rewards for risk-taking in a highly uncertain environment. Since then, business fixed investment is up 13%.
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(Excerpt) Read more at online.wsj.com ...
Further proof of the Clinton Economic Canard® (usually offered with the Standard Economic Surplus® in the 1990s Canard)
Question for liberals: If Clinton lied about inhaling, why wouldn't he lie about the economy?
Clinton would lie about what he ate for breakfast, just because he could, and just to stay in top lying form. An unusually good liar requires lots of practice.
Yep, and every chance GWB got, he came out and told us everything was fine. He had no clue as to what was going on.
But the assumption amongst highly educated six figure economists is that rising incomes and inflation are one in the same. Good luck on getting that myth overturned.
The business spending depression started under Clinton, but it got much worse under GWB.
Interest rates were already too high before that, because Greenspan had already been following the destructive strong dollar policy of Clinton/Rubin. The rate hikes in 1999/2000 were Greenspan's personal vendetta against the stock market and wealth in general. The resulting economic decline is solely Greenspan's responsibility. However, not only did GWB not ask for Greenspan's resignation, he nominated him for another term.
Clinton reminds me of an old cliche which used to be heard a lot in the South, "he would rather climb a tree to tell a lie than stand on the ground and tell the truth".
Bill Clinton, are you listening?
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