ELECTION 2012 – Blame Bush, Low Taxes & Trickle-down economics?
The Democrat's argument this election year 2012, is of the bad economy because of the Bush administration's lowering of taxes and Republican trickle-down economics. Well....
Obama has said, “that he's only proposing to return the top tax rate to the level it was raised to under President Bill Clinton, when job growth subsequently soared”. The charts would indicate this statement as true, except at that time the U.S. was going through a major industrial change with technology. Companies of all sizes were now able to utilize computers, because the cost were coming down drastically, which increased productivity and higher paying jobs. Also this period included the build up of the Internet, again creating new and high paying jobs. Clinton was fortunate, this new technological era could sustain his “Omnibus Budget Reconciliation Act of 1993”. And a Republican controlled Congress kept the debt manageable. Whereas, we can also see the effects of President H.W. Bush's raising the top tax rate from 28% to 31% in 1990 and spending was getting out of control.
The technology revolution also brought what is called the “Dot-com Bubble” starting in 2000 thru 2001 causing a majority of companies to start massive layoffs and many closures. What made Clinton's era successful was falling apart even before President W. Bush took office in 2001. Not only did W. Bush have to deal with the “Dot-com Bubble”, but also the economic impact of 9/11. Recall that airplanes were grounded and Wall Street was closed having a huge impact on Commerce sending the economy into recession. Lowering interest rates by the Federal Reserve and two tax decrease measures by W. Bush administration in 2001 and 2003 finally got employment growth going again and tax revenues were actually increasing between 2004 and 2007. But the Federal Reserve keeping interest rates low for such a long period of time appears to have been good for employment growth by creating a housing boom. Unfortunately not publicized, the low rates were causing a big problem for pension plans in sustaining the 8% growth rate to meet pension obligations. Pension plans are highly utilized by unions, federal and state government. My theory, to over come this problem, pension managers sat down with Wall Street. Since the housing market was so robust, Mortgage-Backed Securities appeared to be a good solution.
So studying the charts, what happened in 2007? Was it W. Bush and Republican tax cuts as the Democrat's want you to believe and trickle-down economics. Let's see, 2007 the Democrats took control over the House and Senate, interesting. One of their first bills was the “Fair Minimum Wage Act of 2007 “ which Republicans argued would increase unemployment. This Act implemented the largest percentage increase in the minimum wage over three years in history. Looking at the charts in hindsight, appears the Republican were correct. This did increase consumer spending, which in turn spawned inflation causing the Federal Reserve to start raising interest rates. What they did not take into consideration was the Global Economic impact. The first phase of the Act companies were able to handle, but the last 2 phases started having an impact on their bottom lines and a sharp decline in tax revenues. Requiring outsourcing of labor functions to China and India, thus the start of layoffs. But the raising of interest rates probably had the largest impact on employment by creating the end of the housing boom, thus the “Housing Bubble bursting”. Exposing the tactics Wall Street used to satisfy pension managers.
Now comes 2009, the Democrats not only control the House and Senate, but now control the White House. The U.S. economy was falling off a cliff, so the Democrats blamed W. Bush and instituted massive spending “hoping” that would save the day, instead of supporting business. Do the Americans realize there is over $1.2 Trillion dollars of U.S. Corporate money sitting outside the country, because Obama and the Democrats are unwilling to work with businesses. Obama's major priority was to pass a major health plan, instead of putting his focus more on the economy. He and the Democrats knew this was the best time for them to begin their Socialist agenda, so they passed the “Affordable Care Act” in 2010. They only were able to pass the Act by changing the word “tax” in the mandate to “penalty”, as Obama had campaigned he would not raise taxes. I still have not found the math that substantiates where more insurance means lower costs, but just the opposite. Acts passed and proposed by Obama and fellow Democrats are no different than ones imposed by the likes of dictators.
Well in 2010 some American people started to wake up and voted to take away Democrat control in the House and limit their control in the Senate. A move that appears from the chart to in itself has helped spur employment growth. But still not enough to implement measures to support business. Business should be the foundation of an economy, not government. My concern is, if government chooses not to work with businesses, what happens to this country if they pack up and leave. A weak economy means continued low interest rates. And with continued low interest rates, pension plans are now no more than a Ponzi Scheme, so people who depend on these for retirement, you have been warned. They require bigger government to meet their obligations and government is being forced to downsize. The Obama administration believes in taxing you for saving. I guess, as long as they keep the people in debt, they cannot complain about the government's debt growing.
So now in 2012, we are being bombarded with campaign ads. Why does a sitting President have to put out so many ads? Obama says, “We cannot go back to Republican lower taxes and trickle-down economics” and “we need trickle-up economics instead”. Hmm, obviously he has not studied the chart from the Labor Department. Wouldn't raising the minimum wage be classified as “trickle-up”?
Therefore, I hope I have brought forth FACTS that contradict many words said through campaign and media messages of this countries path. It is time the PEOPLE take back their country.
Writer: registered Independent