I'm sorry georges, but I have to disagree. While I'll agree that socialist policies are not popular in the US, the laissez-faire economics of the Bush administration have caused a dramatic shift in wealth in this country.
People keep asserting this, but it's all based on
100% assumption. The Clinton administration actually cut major welfare and unemployment benefits in 1996-1998, many of these programs were then re-introduced and/or increased by W.
Understand it has really
nothing to do with Democrat v. Republican politics. W.'s inheritance of massive negative growth the moment he walked into office and the resulting recession and layoffs before he was even in one quarter, the Bush administration had to quickly and costily increase welfare and unemployment benefits. He had to expand them yet again after 9/11. This really wasn't by choice.
Now he did eventually pushed for a broad tax cut, percentage-wise, just as JFK and Reagan did 40 and 20 years earlier, respectively. The results of this had the
exact same effect that those under JFK and Reagan did. Aggregate taxes collected have
increased, and it has
heavily increased by almost 40%
year-after-year for the last two years from
high income earners and corporations. In fact, we immediately saw a rebound in the market and an increase in corporate spending/hiring when the 2003 tax cuts were finally passed.
That has allowed him to cut the deficit in half over the last year. Understand the deficit that was the result of the massive slide that started in the economy in 2000Q1, a full year before he was sworn in. The sad double-whammy is that in a recession, you not only see federal revenues drop signficantly, but your also expending more in welfare and other benefits that people don't use until they are not earning or earning as much, etc...
Now Clinton ran into it too, although it was shorter because the recession was already 2 years-old when he walked into office. That meant the economy was starting to pick up by 1994 -- 4 years later (2 into his first term). It took until about 2005 before the same happened for W. -- also 4 years later (all 4 into his term). Now we've seen a massive pick-up in these last 2 -- although I don't know if its sustainable with energy costs as well as our trade deficits.
Put simply the rich have gotten richer, the poor have gotten poorer and the middle class is declining.
Actually, inflation has far more to do with that than anything. But if you look at the statistics that the OMB has been keeping since 1971, they have a rather startling reality.
The more the high income earners pay in income taxes and businesses pay in tax on profits, the more separation there is between the wealthy and income earners. Why is that? Simple, the more you increase income taxes, the
less wealth you actually allow income earners to gain, which is typically investments into more private sector jobs. And the more you increase corporate taxes, the
less revenue/profit they have to expand and hire more people.
This, combined with the cuts of JFK, Reagan and W. overwhelmingly prove the fact that we are well beyond the 47% total taxation rate that Alexander Hamilton theorized would cause
less taxes collected and a reduced private sector economy.
Government can and should implement market controls.
The government does. In fact, I really tire of people ignoring the fact that it was under the Clinton administration that we had companies like Enron and other things. There was so much "false wealth," "overreported revenues" and "unreported taxes" that our economy was significantly built on wealth that just didn't exist. At the same time, I can't exact blame the Clinton administration for the poor GAAP practices across the industry. But it does explain why W. really had a mess of an economy to deal with the second he walked in.
Understand the debt is just the resulting "position" of how much the government owes. The surplus/deficit is then just a "velocity snapshot" of current economy. It doesn't show the "acceleration delta" of where the economy is going. The deficit was accelerating at over $200B (negative!) in Clinton's last year in office, basically
erroding the entire surplus the very first quarter W. got in.
This is not socialism it's responisible economic stewerdship. When business has no one examining the proverbial books, we see a dramatic increase in mergers which leads to less efficiency and less competition.
And, again, I would argue the Bush administration has done a
far better job of enforcing GAAP and other policies and corporate ethics/law than the Clinton administration did -- largely out of the mess that was left at the end of the Clinton administratoin. Now I am
not blaming the Clinton administration for it, but I am saying that the W. is doing a far better job in holding businesses accountable for their financial statements.
Firms tend to look for short-term profits over long-term stability, e.g. Enron, World-Com.
Again, you're making my case for me that it wasn't the Bush administration.
The US (especially this Administration) likes to point to its historically low unemployment rate. What many people do not realize is that the unemployment rate is a very poor indicator of the "job health" of the country. It does not take into account those who have lost their jobs and do not apply for unemployment benefits, nor does it account for the natural growth in the job force.
And the same could be said during the Clinton administration as well.
Let's face it, unemployment has
always been a poor indicator of the direction of the economy. Jobs are the last things to be cut and the last things to come back. It basically takes a recession (3 continuous quarters of negative growth) for jobs to be cut. Clinton had massive negative growth in 2000Q1, Q3 and Q4 -- only a slight growth in Q2. Had it not been for Q2, it would have officially been a recession before even the 2000 election. That includes eroding the surplus from hundreds of billions to virtually nothing once the Bush administration started collecting federal personal and corporate withholdings in his first two quarters -- a reality he had nothing to do with.
The jobs were cut after 2001Q1, when the recession was officially declared. More jobs got cut after 9/11. Yes, this includes 2001 April and 2001 December for me
personally. I'm no fan of W. and if I didn't "pay attention" to elementary economics, I should blame W. But because I understand jobs are the last things to be cut, I understand my job loss started in 1999.
The country needs to create a minimum of 350k jobs per month in order to keep up with the growth in our population. The Bush Administration has had the worst job creation record in the last 40 years.
Of course, because his entire first 4 years, 2001-2005 were in a recession, layoffs and the aftermath of hiring freezes, just like 1991-1995 was for H. Bush and Clinton (shared almost equally).
He's also dealing with the fact that corporate ethics were totally decimated in the late '90s, but we didn't see the effects until his administration. Countless companies have gone under, loss of pensions and countless other negative results for many employees that have only added to this.
Look, you can look at statistics or you can look at why -- I don't like how much the Bush administration spends, but at least
high income and corporations are now paying the bulk of taxes, more than ever before!
I don't know exactly what point you were trying to make with the Euro, but the majority of investors who trade in currency to whom I've spoken feel that the dollar is weakening, our core financials are not as strong. Many are fearful that the Chinese may try and flood the bond market with the billions of US bonds they have bought as a result of our trade deficit.
Yes, this is one very troubling aspect of our relationship with China. The American consumer should be aware that their cheap buying power is costing us our future. Both Clinton and W. have utterly failed to keep our future in mind there.
Europe while not a unified pillar of economic strength offers a less risky choice. Also, as we see more and more commodities move to the Euro for pricing (there have been rumors that oil may be sold in euros in the next couple of years), the dollar will lose more of its importance.
Agreed on the dollar, although I don't know if the Euro will be the currency of choice either.
As for the EU constitution, I didn't read it. From what I saw it was quite a large document. Simple affirmations of common beliefs and protections for the citizenry would have been more effective. But hey I'm just an American. :georges:
The problem is that you could wipe out the US federal defense budget and you'd still be left with 70% social, over 70% of those being entitlement programs or their administration.
