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Posts Tagged ‘Bill Clinton’

I’ve said lots of nice things about Bill Clinton, noting that economic freedom increased during his tenure, in part because the burden of federal spending declined to 18.2 percent of GDP.

He also was a very colorful character who had…how shall we say this…a certain zest for life. Which is why this image that popped into my inbox is worth sharing.

Sort of the same theme as this Clinton-Schwarzenegger post.

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Actually, Bill Clinton must be something even worse than a social Darwinist. That’s because the title of this post is wrong. Obama said that Paul Ryan’s plan (which allows spending to grow by an average of 3.1 percent per year over the next decade) is a form of “social Darwinism.”

Proponent of social Darwinism?

But the proposal from the House Budget Committee Chairman only reduces the burden of federal spending to 20.25 percent of GDP by the year 2023.

Yet when Bill Clinton left office in 2001, following several years of spending restraint, the federal government was consuming 18.2 percent of economic output.

And by the President’s reasoning, this must make Clinton something worse than a Darwinist. Perhaps Marquis de Sade or Hannibal Lecter.

Here’s a blurb from the New York Times on Obama’s speech.

Mr. Obama’s attack, in a speech during a lunch with editors and reporters from The Associated Press, was part of a broader indictment of the Republican economic blueprint for the nation. The Republican budget, and the philosophy it represents, he said in remarks prepared for delivery, is “antithetical to our entire history as a land of opportunity and upward mobility for everyone who’s willing to work for it.” …“Disguised as a deficit reduction plan, it’s really an attempt to impose a radical vision on our country. It’s nothing but thinly veiled social Darwinism,” Mr. Obama said. “By gutting the very things we need to grow an economy that’s built to last — education and training, research and development — it’s a prescription for decline.”

I’m particularly amused by the President’s demagoguery that Ryan’s plan is “antithetical to our entire history” and “a radical vision.”

Is he really unaware that a small and constrained central government is part of America’s history and vision? Doesn’t he know that the federal government, for two-thirds of our nation’s history, consumed less than 5 percent of GDP?

Of course, that was back in the dark ages when people in Washington actually believed that the Constitution’s list of enumerated powers in Article 1, Section 8, actually enumerated the powers of the federal government. How quaint.

No wonder this Ramirez cartoon is so effectively amusing. It certainly seems to capture the President’s view of America’s founding principles.

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I’m not overly excited about the 2012 presidential race, especially since the major choices at this point are three candidates who don’t seem to have much commitment to economic freedom and individual liberty.

  1. Obama (Tweedledee)
  2. Romney (Tweedledum)
  3. Gingrich (hmmm…how about Tweedledoh?)

So when someone sent me this cartoon, I immediately decided it had to be my next blog post.

Too bad we can’t turn the clock back 11 years. I’m not joking when I say I would gladly go back to Bill Clinton. No, he wasn’t a libertarian, but economic freedom increased during his tenure. And I care about results.

Clinton’s track record on spending was especially good. Indeed, I even admitted on TV that I would accept Clinton-era tax rates if we could unravel all the new spending and intervention of the Bush-Obama years.

But what I’d really like is a candidate who could sincerely give these remarks. Or, perhaps even better, make this statement.

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I’ve pointed out on several occasions that the burden of federal spending fell significantly during the Clinton years. Indeed, if we did nothing other than bring federal spending back down to 18.2 percent of GDP (where it was when Clinton left office), we’d have a budget surplus before the end of the decade (even with all the tax cuts made permanent).

Here’s a debate from a couple of months ago, but the issues haven’t changed. I debate Pat Choate (the 1996 running-mate of Ross Perot) about fiscal policy. I explain that spending is the problem and we could solve that problem by unwinding all the counterproductive spending of the Bush-Obama years.

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Proponents of higher taxes are fond of claiming that Bill Clinton’s 1993 tax increase was a big success because of budget surpluses that began in 1998.

That’s certainly a plausible hypothesis, and I’m already on record arguing that Clinton’s economic record was much better than Bush’s performance.

But this specific assertion it is not supported by the data. In February of 1995, 18 months after the tax increase was signed into law, President Clinton’s Office of Management and Budget issued projections of deficits for the next five years if existing policy was maintained (a “baseline” forecast). As the chart illustrates, OMB estimated that future deficits would be about $200 billion and would slightly increase over the five-year period.

In other words, even the Clinton Administration, which presumably had a big incentive to claim that the tax increase would be successful, admitted 18 months after the law was approved that there was no expectation of a budget surplus. For what it’s worth, the Congressional Budget Office forecast, issued about the same time, showed very similar numbers.

Since the Clinton Administration’s own numbers reveal that the 1993 tax increase was a failure, we have to find a different reason to explain why the budget shifted to surplus in the late 1990s.

Fortunately, there’s no need for an exhaustive investigation. The Historical Tables on OMB’s website reveal that good budget numbers were the result of genuine fiscal restraint. Total government spending increased by an average of just 2.9 percent over a four-year period in the mid-1990s. This is the reason why projections of $200 billion-plus deficits turned into the reality of big budget surpluses.

Republicans say the credit belongs to the GOP Congress that took charge in early 1995. Democrats say it was because of Bill Clinton. But all that really matters is that the burden of federal spending grew very slowly. Not only was there spending restraint, but Congress and the White House agreed on a fairly substantial tax cut in 1997.

To sum things up, it turns out that spending restraint and lower taxes are a recipe for good fiscal policy. This second chart modifies the first chart, showing actual deficits under this small-government approach compared to the OMB and CBO forecasts of what would have happened under Clinton’s tax-and-spend baseline.

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