Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: epow
Your analysis is partly true, but only partly. Presidents can and do have effect on the economy. By pressuring Congress to cut taxes, Presidents can stimulate investment; by raising them, they suppress investment. Kennedy and Reagan reduced taxes, and caused economic booms; Hoover and Roosevelt increased them, leading to a long depression. Clinton may seem like an exception at first, but only because he benefitted from the Reagan tax cuts. After Clinton's tax hike, the top tax level was still lower than it had been before Reagan cut taxes. Once the Bush tax cuts are sped up, the economy will renew its boom.
116 posted on 03/06/2003 2:02:44 PM PST by Wavyhill
[ Post Reply | Private Reply | To 95 | View Replies ]


To: Wavyhill
I fully agree on the tax cut issue. No question that tax policy is critically important to the growth of the economy, either negatively or positively. But I don't think it is all-important to the exclusion of all other factors.

One of my intentions was to point out that the Democrats have often been extraordinarily fortunate to have followed GOP administrations which were turned out because Americans believed they had mismanaged the economy. Witness the uncanny good luck of high-tax proponent Clinton taking office just as the economy was entering the greatest boom of the century, no credit to him. Whether caused by a cycle or by fiscal policies, the onset of upturns and downturns, often resulting from tax policies, seem to lag behind their cause at a slow enough tempo to usually insure a Democratic president a successful economy during his tenure purely by chance. OTOH, a downturn, usually caused by some destructive Democratic policy, seems to always lag sufficiently to insure the downturn occurs at some point in a GOP administration, usually around election time. Call it lucky timing I suppose. The Carter and Reagan presidencies were both exceptions to the broad rule.

One of my reasons for assigning considerable importance to the cyclical nature of national economies is the Clinton administration's exceptional run of good fortune in the 1990s. There were no significant tax cuts during his tenure that I remember after his first year major tax increase, yet the economy continued to expand dramatically for another seven years afterward until the cycle caught up to it in his last year. Or did the "lag" between his tax hike and an inevitable result account for his good fortune? I'm not sure, but seven years seems like a longer than normal lag.

Let's see, huge tax hike enacted during a period of slow but increasing economic growth, followed 6-7 years later by downturn, right? Well, OK, maybe I'm giving too much importance to the business cycle phenomenon, but I still think it's an important factor.

120 posted on 03/06/2003 3:59:59 PM PST by epow
[ Post Reply | Private Reply | To 116 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson