The Myth of Clintonomics

People that will not learn the lessons of history are doomed to repeat the mistakes and fail to take advantage of the wise choices.

The Obama Administration is confusing correlation and causation when it come to the Clinton tax hikes. Obama does not realize that the economy grew in spite of the policies not because of them.

Someone should remind the incoming President of the explosion of technology that took place from 1990-1995. This growth was a tidal wave. Clinton’s did not cause it but neither could they stop it. Unless America experiences another such serendipity, the Obama tax plan will plunge the country into a dark depression.

President-elect Obama says he’s modeling his recovery plan on Clintonomics because it pulled the economy out of a ditch last decade. But that’s an old myth – and a dangerous one at that.”

“I’ve got an economic plan similar to Bill Clinton’s,” Obama has said, including tax hikes on the rich and Keynesian pump-priming, among other new government spending.

He rationalizes that Clinton raised taxes during a recession, and look what happened — average wages went up, along with economic growth and the stock market. And eventually the Treasury reported surpluses after decades of deficits.

The bull market took off precisely when then-Fed Chairman Alan Greenspan took his foot off the brakes and hit the gas in 1995. It was also then that Republicans took control of Congress — further blunting the effects of the Clinton tax torpedo that had taken effect the previous year.

Clinton also benefitted from innovations long in the making, including the Pentium chip released in March 1993 and Microsoft’s Windows program released in August 1995. These together made the Internet boom possible.

As for the budget surpluses, they came as a complete surprise to Clinton economic forecasters, whose static models only predicted their tax hikes on the rich would narrow the budget gap, not get it into the black.

Their “deficit-reduction plan” didn’t create the surpluses at all. They were a direct result of a tidal wave of capital-gains revenues generated by the GOP-led stock boom.

Investor’s Business Daily has the entire article.

Malkin, Right Voices, and Hot Air have good articles on taxes.

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2 replies
  1. Larry
    Larry says:

    I have read the full article about this and the author does a good job of debunking the myth that Bill Clinton was responsible for the great economic boom we experienced during his tenure as President.

  2. Mad Jayhawk
    Mad Jayhawk says:

    When Bush took off he was faced with a bursting stock market bubble that was generating capital losses like crazy. Then for two or three years tax revenues were depressed by people using these losses to offset all types of income.

    When Clinton benefited from increase capital gain tax revenue during the out-of-control Clinton Bubble all the losses from previous downturns had been worked off and what he had was pure gravy in tax revenue.

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