The Farce of the Clinton Economy Legacy: Part 1
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One great “legacy” left by former President Clinton was his strong domestic economy. Despite its positive highlights, I claim he does not deserve the credit and accolades he receives. This is the first commentary in a three part series.
Bill Clinton often enjoys taking credit for a long wave of economic prosperity that began ten years before he was elected. However, the person responsible for laying the groundwork was not “Slick Willie.” The positive upswing during the Clinton years actually began in 1982 with the policies of Reagan. Tax-rate cuts, a strong dollar, deregulation, free trade, and victory in the cold war unleashed entrepreneurial and technological innovations that transformed our economy.
From 1967-82, the Dow-Jones industrial average suffered, falling 23 percent in nominal terms. Keynesian policies caused the wealth of American families to be gobbled back into the government system. In 1982 when Regan took office, the Dow Jones Industrial Average was at 800. Over the rest of the Reagan years the market more than tripled. Two thousand bull market stocks soared by 12 percent per year, raising the net worth of U.S. households by $30 trillion. The real bullish stock market began in 1982, not 1992.
The 80s brought in a time of lower inflation and interest rates. Paul Volker was able to break the back of inflation through unprecedented interest rate hikes. This initial hawkish policy allowed for lower rates and inflation for decades. Since the early 1980s inflation has fallen by roughly a half a percent a year.
President Reagan’s final tax cut package featured a reduced rate of 25% and an effective rate of 23%. In 1980, Jimmy Carter's last year as president, the Treasury raised just $517 billion. At the end of Reagan's term it raised $991 billion. A 92 percent increase, during a period when consumer prices rose just 46 percent with major tax cuts in place, is nothing to snuff at. This simply proves that more taxes do not provide heavier government coffers.
From 1982-89, the United States experienced the longest period of growth in peacetime history. The GDP grew at an annual rate of 3.5%, a rate not equaled until the Republicans took control of Congress in 1994. Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush and Clinton years. The real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years. It experienced a loss of almost $1,500 in the post-Reagan years.
Reagan's successful defense policy, which led to the demise of the Soviet empire and the spread of democracy and capitalism, helped create vast new markets for American goods.
The 1980s were years of economic progress, not decline as some claim. Real GDP grew by about one-third in the 1980s. The economic gains were widely distributed among income groups, from the richest fifth to the poorest fifth. It's an amazing record, considering that throughout his term the Democrats held majorities of from 51 to 101 seats in the House.
The economy of the 1980s outperformed that of the 1990s in virtually every measurable category. Economic growth, job creation, incomes, and productivity climbed at faster, healthy rates. Clinton and Bush have both chipped away at Reagan's economic legacy, but it still survives the test of time. Reagan's vision of economic freedom trailblazed the path to economic stability and growth. We should remember and embrace it.
http://www.xanga.com/home.aspx?user=One_for_the_Gipper
http://www.livejournal.com/users/oneforthegipper/
Bill Clinton often enjoys taking credit for a long wave of economic prosperity that began ten years before he was elected. However, the person responsible for laying the groundwork was not “Slick Willie.” The positive upswing during the Clinton years actually began in 1982 with the policies of Reagan. Tax-rate cuts, a strong dollar, deregulation, free trade, and victory in the cold war unleashed entrepreneurial and technological innovations that transformed our economy.
From 1967-82, the Dow-Jones industrial average suffered, falling 23 percent in nominal terms. Keynesian policies caused the wealth of American families to be gobbled back into the government system. In 1982 when Regan took office, the Dow Jones Industrial Average was at 800. Over the rest of the Reagan years the market more than tripled. Two thousand bull market stocks soared by 12 percent per year, raising the net worth of U.S. households by $30 trillion. The real bullish stock market began in 1982, not 1992.
The 80s brought in a time of lower inflation and interest rates. Paul Volker was able to break the back of inflation through unprecedented interest rate hikes. This initial hawkish policy allowed for lower rates and inflation for decades. Since the early 1980s inflation has fallen by roughly a half a percent a year.
President Reagan’s final tax cut package featured a reduced rate of 25% and an effective rate of 23%. In 1980, Jimmy Carter's last year as president, the Treasury raised just $517 billion. At the end of Reagan's term it raised $991 billion. A 92 percent increase, during a period when consumer prices rose just 46 percent with major tax cuts in place, is nothing to snuff at. This simply proves that more taxes do not provide heavier government coffers.
From 1982-89, the United States experienced the longest period of growth in peacetime history. The GDP grew at an annual rate of 3.5%, a rate not equaled until the Republicans took control of Congress in 1994. Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush and Clinton years. The real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years. It experienced a loss of almost $1,500 in the post-Reagan years.
Reagan's successful defense policy, which led to the demise of the Soviet empire and the spread of democracy and capitalism, helped create vast new markets for American goods.
The 1980s were years of economic progress, not decline as some claim. Real GDP grew by about one-third in the 1980s. The economic gains were widely distributed among income groups, from the richest fifth to the poorest fifth. It's an amazing record, considering that throughout his term the Democrats held majorities of from 51 to 101 seats in the House.
The economy of the 1980s outperformed that of the 1990s in virtually every measurable category. Economic growth, job creation, incomes, and productivity climbed at faster, healthy rates. Clinton and Bush have both chipped away at Reagan's economic legacy, but it still survives the test of time. Reagan's vision of economic freedom trailblazed the path to economic stability and growth. We should remember and embrace it.
http://www.xanga.com/home.aspx?user=One_for_the_Gipper
http://www.livejournal.com/users/oneforthegipper/